<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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, 1998
--------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to ________________________
Commission File Number 0-13333
---------
Enstar Income Program 1984-1, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1581136
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10900 Wilshire Boulevard - 15th Floor
Los Angeles, California 90024
- --------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 824-9990
-------------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Exhibit Index located at Page E-1
<PAGE> 2
PART I - FINANCIAL INFORMATION
ENSTAR INCOME PROGRAM 1984-1, L.P.
CONDENSED BALANCE SHEETS
===========================================
<TABLE>
<CAPTION>
December 31, June 30,
1997* 1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 462,900 $ 625,400
Accounts receivable, less allowance of $28,000 and
$7,400 for possible losses 107,500 79,800
Insurance claim receivable 399,700 392,400
Prepaid expenses and other assets 135,800 160,700
Property, plant and equipment, less accumulated
depreciation and amortization of $10,477,900 and $10,765,000 3,387,200 3,522,000
Franchise cost, net of accumulated
amortization of $235,400 and $108,200 74,600 67,300
Deferred loan costs and other charges, net 128,400 110,300
----------- -----------
$ 4,696,100 $ 4,957,900
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
LIABILITIES:
Accounts payable $ 529,800 $ 442,100
Due to affiliates 754,200 752,800
Note payable - affiliate 250,000 --
----------- -----------
TOTAL LIABILITIES 1,534,000 1,194,900
----------- -----------
COMMITMENTS AND CONTINGENCIES
PARTNERSHIP CAPITAL (DEFICIT):
General partner (41,100) (35,100)
Limited partners 3,203,200 3,798,100
----------- -----------
TOTAL PARTNERSHIP CAPITAL 3,162,100 3,763,000
----------- -----------
$ 4,696,100 $ 4,957,900
=========== ===========
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
-2-
<PAGE> 3
ENSTAR INCOME PROGRAM 1984-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
===========================================
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Three months ended
June 30,
-------------------------------
1997 1998
----------- -----------
<S> <C> <C>
REVENUES $ 1,331,700 $ 1,317,300
----------- -----------
OPERATING EXPENSES:
Service costs 484,200 466,500
General and administrative expenses 265,200 177,400
General Partner management fees
and reimbursed expenses 142,300 169,500
Depreciation and amortization 139,800 182,400
----------- -----------
1,031,500 995,800
----------- -----------
OPERATING INCOME 300,200 321,500
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 7,500 7,300
Interest expense (45,900) (28,000)
----------- -----------
(38,400) (20,700)
----------- -----------
NET INCOME $ 261,800 $ 300,800
=========== ===========
Net income allocated to General Partner $ 2,600 $ 3,000
=========== ===========
Net income allocated to Limited Partners $ 259,200 $ 297,800
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 8.66 $ 9.95
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,940 29,940
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
-3-
<PAGE> 4
ENSTAR INCOME PROGRAM 1984-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
===========================================
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Six months ended
June 30,
-------------------------------
1997 1998
----------- -----------
<S> <C> <C>
REVENUES $ 2,700,600 $ 2,647,300
----------- -----------
OPERATING EXPENSES:
Service costs 979,400 946,500
General and administrative expenses 462,500 358,300
General Partner management fees
and reimbursed expenses 280,800 337,000
Depreciation and amortization 276,300 360,800
----------- -----------
1,999,000 2,002,600
----------- -----------
OPERATING INCOME 701,600 644,700
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 19,100 11,800
Interest expense (74,900) (55,600)
----------- -----------
(55,800) (43,800)
----------- -----------
NET INCOME $ 645,800 $ 600,900
=========== ===========
Net income allocated to General Partner $ 6,500 $ 6,000
=========== ===========
Net income allocated to Limited Partners $ 639,300 $ 594,900
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 21.35 $ 19.87
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,940 29,940
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
-4-
<PAGE> 5
ENSTAR INCOME PROGRAM 1984-1, L.P.
STATEMENTS OF CASH FLOWS
===========================================
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Six months ended
June 30,
-------------------------------
1997 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 645,800 $ 600,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 276,300 360,800
Amortization of deferred loan costs 44,500 14,600
Increase (decrease) from changes in:
Receivables, prepaid expenses and other assets (6,900) 10,100
Accounts payable 82,000 (87,700)
----------- -----------
Net cash provided by operating activities 1,041,700 898,700
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (295,900) (478,600)
Increase in intangible assets (24,900) (2,200)
----------- -----------
Net cash used in investing activities (320,800) (480,800)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to affiliates 88,000 (1,400)
Repayment of debt (1,042,800) (250,000)
Deferred loan costs -- (4,000)
----------- -----------
Net cash used in financing activities (954,800) (255,400)
----------- -----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (233,900) 162,500
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 1,004,400 462,900
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 770,500 $ 625,400
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
-5-
<PAGE> 6
ENSTAR INCOME PROGRAM 1984-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
and six months ended June 30, 1998 and 1997 are unaudited. These condensed
interim financial statements should 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, 1998 are not necessarily
indicative of results for the entire year.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
The Partnership has a management and service agreement with a wholly
owned subsidiary of the General Partner (the "Manager") for a monthly management
fee of 5% of revenues, excluding revenues from the sale of cable television
systems or franchises. Management fee expense approximated $65,900 and $132,400
for the three and six months ended June 30, 1998.
In addition to the monthly management fee described above, the
Partnership reimburses the Manager for direct expenses incurred on behalf of the
Partnership and for the Partnership's allocable share of operational costs
associated with services provided by the Manager. All cable television
properties managed by the General Partner and its subsidiary are charged a
proportionate share of these expenses. The General Partner has contracted with
Falcon Holding Group, L.P. ("FHGLP"), an affiliated partnership, to provide
corporate management services for the Partnership. Corporate office allocations
and district office expenses are charged to the properties served based
primarily on the respective percentage of basic subscribers or homes passed
(dwelling units within a system) within the designated service areas. The total
amount charged to the Partnership for these services approximated $103,600 and
$204,600 for the three and six months ended June 30, 1998. Management fees and
reimbursed expenses due the General Partner are non-interest bearing.
Payments of management fees and reimbursed expenses were deferred in
prior years pursuant to restrictions in the Partnership's note payable
agreement. The cumulative amount deferred was approximately $1,081,300. On
September 30, 1997, the Partnership obtained new financing and subsequently used
such borrowings and other available cash to pay $619,000 of previously deferred
management fees and reimbursed expenses. The remainder of these deferred
amounts, $462,300, was contributed as an equity contribution by the General
Partner to Enstar Finance Company, LLC ("EFC"), a subsidiary of the General
Partner, and remains an outstanding obligation of the Partnership. In the normal
course of business, the Partnership pays interest and principal to EFC, its
primary lender.
The Partnership also receives certain system operating management
services from affiliates of the General Partner in addition to the Manager due
to the fact that there are no such employees directly employed by the
Partnership. The Partnership reimburses the affiliates for its allocable share
of the affiliates' operational costs. The total amount charged to the
Partnership for these costs approximated $9,400
-6-
<PAGE> 7
ENSTAR INCOME PROGRAM 1984-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (CONTINUED)
and $17,700 in the three and six months ended June 30, 1998. No management fee
is payable to the affiliates by the Partnership and there is no duplication of
reimbursed expenses and costs paid to the Manager.
Certain programming services have been purchased through an affiliate
of the Partnership. In turn, the affiliate charges the Partnership for these
costs based on an estimate of what the General Partner could negotiate for such
programming services for the 15 partnerships managed by the General Partner as a
group. The Partnership recorded programming fee expense of $286,400 and $577,700
for the three and six months ended June 30, 1998. Programming fees are included
in service costs in the statements of operations.
3. EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Earnings and losses per unit of limited partnership interest is based
on the average number of units outstanding during the periods presented. For
this purpose, earnings and losses have been allocated 99% to the Limited
Partners and 1% to the General Partner. The General Partner does not own units
of partnership interest in the Partnership, but rather holds a participation
interest in the income, losses and distributions of the Partnership.
-7-
<PAGE> 8
ENSTAR INCOME PROGRAM 1984-1, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
The Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act") required the Federal Communications Commission ("FCC")
to, among other things, implement extensive regulation of the rates charged by
cable television systems for basic and programming service tiers, installation,
and customer premises equipment leasing. Compliance with those rate regulations
has had a negative impact on the Partnership's revenues and cash flow. The
Telecommunications Act of 1996 (the "1996 Telecom Act") substantially changed
the competitive and regulatory environment for cable television and
telecommunications service providers. Among other changes, the 1996 Telecom Act
provides that the regulation of cable programming service tier ("CPST") rates
will be terminated on March 31, 1999. Because cable service rate increases have
continued to outpace inflation under the FCC's existing regulations, the
Partnership expects Congress and the FCC to explore additional methods of
regulating cable service rate increases, including deferral or repeal of the
March 31, 1999 termination of CPST rate regulation. There can be no assurance as
to what, if any, further action may be taken by the FCC, Congress or any other
regulatory authority or court, or the effect thereof on the Partnership's
business. Accordingly, the Partnership's historical financial results as
described below are not necessarily indicative of future performance.
This Report includes certain forward looking statements regarding,
among other things, future results of operations, regulatory requirements,
competition, capital needs and general business conditions applicable to the
Partnership. Such forward looking statements involve risks and uncertainties
including, without limitation, the uncertainty of legislative and regulatory
changes and the rapid developments in the competitive environment facing cable
television operators such as the Partnership. In addition to the information
provided herein, reference is made to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1997 for additional information regarding
such matters and the effect thereof on the Partnership's business.
RESULTS OF OPERATIONS
The Partnership's revenues decreased from $1,331,700 to $1,317,300, or
by 1.1%, and from $2,700,600 to $2,647,300, or by 2.0% for the three and six
months ended June 30, 1998 as compared to the corresponding periods in 1997. Of
the $14,400 decrease in revenues for the three months ended June 30, 1998 as
compared to the corresponding period in 1997, $77,100 was due to decreases in
the number of subscriptions for basic, premium, tier and equipment rental
services. The decrease was partially offset by a $58,000 increase due to
increases in regulated service rates that were implemented by the Partnership in
1997 and a $4,700 increase in other revenue producing items. Of the $53,300
decrease in revenues for the six months ended June 30, 1998 as compared to the
corresponding period in 1997, $163,000 was due to decreases in the number of
subscriptions for basic, premium, tier and equipment rental services. The
decrease was partially offset by a $95,100 increase due to increases in
regulated service rates that were implemented by the Partnership in 1997 and a
$14,600 increase in other revenue producing items. As of June 30, 1998, the
Partnership had approximately 11,100 basic subscribers and 4,500 premium service
units.
-8-
<PAGE> 9
ENSTAR INCOME PROGRAM 1984-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
Service costs decreased from $484,200 to $466,500, or by 3.7%, and from
$979,400 to $946,500, or by 3.4%, for the three and six months ended June 30,
1998 as compared to the corresponding periods in 1997. Service costs represent
costs directly attributable to providing cable services to customers. The
decreases were principally due to lower copyright fees and programming expense.
Copyright fees decreased due to decreases in revenues as described above.
Programming expense decreased as a result of decreases in the number of
subscribers to certain premium channels.
General and administrative expenses decreased from $265,200 to $177,400
or by 33.1%, and from $462,500 to $358,300, or by 22.5%, for the three and six
months ended June 30, 1998 as compared to the corresponding periods in 1997. The
decreases were primarily due to reductions in bad debt expense and personnel
costs. Personnel costs decreased primarily due to reduced expenses allocated by
an affiliate of the General Partner that discontinued management of the
Partnership's Tennessee operations in the fourth quarter of 1997. Such services
are now being provided by the General Partner.
Management fees and reimbursed expenses increased from $142,300 to
$169,500, or by 19.1%, and from $280,800 to $337,000, or by 20.0%, for the three
and six months ended June 30, 1998 as compared to the corresponding periods in
1997. Management fees decreased by $700 and $2,600 for the three and six months
ended June 30, 1998 as compared to the corresponding periods in 1997, in direct
relation to decreased revenues as described above. Reimbursed expenses allocated
by the General Partner increased by $27,900 and $58,800 for the three and six
month periods as a result of transferring system operating management of the
Partnership's Tennessee systems from an affiliate to the General Partner.
Depreciation and amortization expense increased from $139,800 to
$182,400, or by 30.5%, and from $276,300 to $360,800, or by 30.6%, for the three
and six months ended June 30, 1998 as compared to the corresponding periods in
1997. The increases were primarily due to asset additions.
Operating income increased from $300,200 to $321,500, or by 7.1%, and
decreased from $701,600 to $644,700, or by 8.1%, for the three and six months
ended June 30, 1998 as compared to the corresponding periods in 1997. The three
months' increase was primarily due to lower bad debt expense and copyright fees.
The six months' decrease was principally the result of decreases in revenues and
increases in depreciation and amortization expense and reimbursed expenses as
described above.
Interest income decreased from $7,500 to $7,300, or by 2.7%, and from
$19,100 to $11,800, or by 38.2%, for the three and six months ended June 30,
1998 as compared to the corresponding periods in 1997. The decreases were due to
lower cash balances available for investment.
Interest expense decreased from $45,900 to $28,000, or by 39.0%, and
from $74,900 to $55,600, or by 25.8%, for the three and six months ended June
30, 1998 as compared to the corresponding periods in 1997, due to lower average
borrowings and lower average interest rates in the 1998 periods.
Due to the factors described above, the Partnership's net income
increased from $261,800 to $300,800, or by 14.9%, and decreased from $645,800 to
$600,900, or by 7.0%, for the three and six months ended June 30, 1998 as
compared to the corresponding periods in 1997.
-9-
<PAGE> 10
ENSTAR INCOME PROGRAM 1984-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
Based on its experience in the cable television industry, the
Partnership believes that operating income before depreciation and amortization
(EBITDA) and related measures of cash flow serve as important financial analysis
tools for measuring and comparing cable television companies in several areas,
such as liquidity, operating performance and leverage. EBITDA is not a
measurement determined under generally accepted accounting principles ("GAAP")
and does not represent cash generated from operating activities in accordance
with GAAP. EBITDA should not be considered by the reader as an alternative to
net income as an indicator of financial performance or as an alternative to cash
flows as a measure of liquidity. In addition, the definition of EBITDA may not
be identical to similarly titled measures used by other companies. EBITDA as a
percentage of revenues increased from 33.0% to 38.3% and from 36.2% to 38.0%
during the three and six months ended June 30, 1998 as compared to the
corresponding periods in 1997. The increases were primarily due to decreases in
copyright fees and bad debt expense as described above. EBITDA increased from
$440,000 to $503,900, or by 14.5%, and from $977,900 to $1,005,500, or by 2.8%,
during the three and six months ended June 30, 1998 as compared to the
corresponding periods in 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary objective, having invested its net offering
proceeds in cable systems, is to distribute to its partners all available cash
flow from operations and proceeds from the sale of cable systems, if any, after
providing for expenses, debt service and capital requirements. In general, these
requirements involve expansion, improvement and upgrade of the Partnership's
existing cable systems and were $478,600 in the first six months of 1998. As of
the date of this Report, substantially all of the available channel capacity in
the Partnership's cable television systems is being utilized and each of such
systems requires an upgrade. The entire upgrade program is presently estimated
to require aggregate capital expenditures of approximately $8,000,000 and covers
12 franchise areas. These upgrades are currently required in five existing
franchise agreements. The upgrades required by the five existing franchise
agreements are estimated to cost approximately $3,400,000 and must be completed
by December 2001 and February 2002.
On September 30, 1997, the Partnership entered into a loan agreement
with EFC for a revolving loan facility of $7,481,700 (the "Facility") of which
$250,000 was advanced to the Partnership at closing. The Partnership prepaid its
outstanding borrowings of $250,000 on June 22, 1998, although the Partnership's
management expects to reborrow under the Facility in the future for the upgrade
of the Partnership's systems.
The Partnership's Facility will mature on August 31, 2001, at which
time all funds previously advanced will be due in full. Borrowings bear interest
at the lender's base rate (8.5% at June 30, 1998) plus 0.625%, or at an offshore
rate plus 1.875%. The Partnership is permitted to prepay amounts outstanding
under the Facility at any time without penalty, and is able to reborrow
throughout the term of the Facility up to the maximum commitment then available
so long as no event of default exists. If the Partnership has excess cash flow
and its ratio of debt to cash flow exceeds 4.25 to 1, or it receives proceeds
from sales of its assets in excess of a specified amount, the Partnership is
required to make mandatory prepayments under the Facility. Such prepayments
permanently reduce the maximum commitment under the Facility.
The Facility contains certain financial tests and other covenants
including, among others, restrictions on incurrence of indebtedness,
investments, sales of assets, acquisitions and other covenants, defaults and
conditions. The Partnership believes it was in compliance with the covenants at
June 30, 1998.
-10-
<PAGE> 11
ENSTAR INCOME PROGRAM 1984-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Facility does not restrict the payment of distributions to partners
unless an event of default exists thereunder or the ratio of debt to cash flow
is greater than 4 to 1. However, due to the upgrade program discussed above, the
General Partner believes it is critical to conserve cash and borrowing capacity
and, consequently, has concluded that it would not be prudent for the
Partnership to resume paying distributions at this time.
Beginning in August 1997, the Partnership elected to self-insure its
cable distribution plant and subscriber connections against property damage as
well as possible business interruptions caused by such damage. The decision to
self-insure was made due to significant increases in the cost of insurance
coverage and decreases in the amount of insurance coverage available.
While the Partnership has made the election to self-insure for these
risks based upon a comparison of historical damage sustained over the past five
years with the cost and amount of insurance currently available, there can be no
assurance that future self-insured losses will not exceed prior costs of
maintaining insurance for these risks. Approximately 65% of the Partnership's
subscribers are served by its system in Brownsville, Tennessee and neighboring
communities. Significant damage to the system due to seasonal weather conditions
or other events could have a material adverse effect on the Partnership's
liquidity and cash flows. The Partnership continues to purchase insurance
coverage in amounts its management views as appropriate for all other property,
liability, automobile, workers' compensation and other types of insurable risks.
The "Year 2000" issue refers to certain contingencies that could result
from computer programs being written using two digits rather than four to define
the year. Many existing computer systems, including certain of the Partnership's
computer systems, process transactions based on two digits for the year of the
transaction (for example, "98" for 1998). These computer systems may not operate
effectively when the last two digits become "00," as will occur on January 1,
2000.
The General Partner has commenced an assessment of the Partnership's
Year 2000 business risks and its exposure to computer systems, to operating
equipment which is date sensitive and to the interface systems of its vendors
and service providers. Based on a preliminary study, the General Partner has
concluded that certain of the Partnership's information systems were not Year
2000 compliant and has elected to replace such software and hardware with Year
2000 compliant applications and equipment, although the decision to replace
major portions of such software and hardware had previously been made without
regard to the Year 2000 issue. The General Partner expects to install
substantially all of the new systems in 1998, with the remaining systems to be
installed in the first half of 1999. The total anticipated cost, including
replacement software and hardware, will be borne by FHGLP.
In addition to evaluating internal systems, the Partnership is
currently assessing its exposure to risks associated with its operating and
revenue generating equipment and has also initiated communications with
significant third party vendors and service suppliers to determine the extent to
which the Partnership's interface systems are vulnerable should those third
parties fail to solve their own Year 2000 problems on a timely basis. The
Partnership currently expects that the cost to replace non-compliant equipment
will be determined during the third quarter of 1998. Such costs will be borne by
the Partnership. There can be no assurance that the systems of other companies
-11-
<PAGE> 12
ENSTAR INCOME PROGRAM 1984-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
on which the Partnership's systems rely will be timely converted and that the
failure to do so would not have an adverse impact on the Partnership's business.
The Partnership continues to closely monitor developments with its vendors and
service suppliers.
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Operating activities provided $143,000 less cash in the six months
ended June 30, 1998 than in the corresponding period in 1997. The Partnership
used $169,600 more cash for accounts payable due to differences in timing of
payments. Changes in accounts receivable, prepaid expenses and other assets
provided $17,000 more cash in the first six months of 1998 due to differences in
the timing of receivable collections and in the payment of prepaid expenses.
The Partnership used $160,000 more cash in investing activities in the
six months ended June 30, 1998 than in the corresponding period of 1997, due to
a $182,700 increase in expenditures for tangible assets, partially offset by a
$22,700 decrease in spending for intangible assets.
Financing activities provided $699,400 more cash in the six months
ended June 30, 1998 than in the comparable 1997 period. The Partnership used
$792,800 less cash for the repayment of debt and $89,400 more cash to pay
liabilities owed to the General Partner and other affiliates. The Partnership
used $4,000 more cash for the payment of deferred loan costs in the 1998 period.
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. However, the Partnership does not believe that its
financial results have been, or will be, adversely affected by inflation in a
material way, provided that the Partnership is able to increase its service
rates periodically, of which there can be no assurance.
-12-
<PAGE> 13
ENSTAR INCOME PROGRAM 1984-1, L.P.
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.28 - Franchise Ordinance thereto
granting a non-exclusive community antenna
television franchise for the Town of
Grifton, North Carolina.
(b) No reports on Form 8-K were filed during the
quarter for which this report is filed.
<PAGE> 14
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.
ENSTAR INCOME PROGRAM 1984-1, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: August 13, 1998 By: /s/ Michael K. Menerey
----------------------------------
Michael K. Menerey,
Executive Vice President,
Chief Financial Officer and
Secretary
<PAGE> 15
ENSTAR INCOME PROGRAM 1984-1, L.P.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
10.28 Franchise Ordinance thereto granting a non-exclusive community
antenna television franchise for the Town of Grifton, North
Carolina.
</TABLE>
E-1
<PAGE> 1
EXHIBIT 10.28
THE TOWN OF GRIFTON
STATE OF NORTH CAROLINA ) RESOLUTION TO APPROVE AN
) AMENDMENT TO ORD NO. 97-06
COUNTY OF GREENE ) CABLE TELEVISION FRANCHISE
) ORDINANCE - FALCON CABLE
TOWN OF GRIFTON
WHEREAS, the Board of Commissioners adopted a Cable Television Franchise
Agreement with Falcon Cable Media on December 9, 1997; and
WHEREAS, said Ordinance No. 97-06, as adopted, contains various inconsistencies
which need to be corrected;
NOW THEREFORE, BE IT RESOLVED AND ADOPTED that the Town Board of Commissioners
of the Town of Grifton hereby approves the following amendments to said
Ordinance:
Any reference to Falcon Cable Media or Falcon shall be replaced with Enstar
Income Program 1984-1, L.P.
RESOLVED AND ADOPTED, this the 14 day of April, 1998.
ATTEST BY: TOWN OF GRIFTON
By: /s/ Patricia Bryan By: /s/ Marian N. McLawhorn
---------------------------- --------------------------------------
Town Clerk Mayor
<PAGE> 2
AN ORDINANCE BY THE BOARD OF COMMISSIONERS OF THE TOWN OF GRIFTON
CONSENTING TO THE CABLE TELEVISION FRANCHISE
AGREEMENT (FRANCHISE ORDINANCE) BETWEEN THE TOWN OF GRIFTON AND FALCON
CABLE MEDIA
WHEREAS, the Town of Grifton (Town) has entered into a cable television
Franchise Agreement with Falcon Cable Media ("Falcon"), which agreement expires
on or about March 9, 1997; and
WHEREAS, the Town deems it appropriate to continue the Cable TV
Franchise Agreement with Falcon Cable Media;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS THAT THE
CABLE TV FRANCHISE AGREEMENT BETWEEN THE TOWN AND FALCON CABLE MEDIA IS
APPROVED AS FOLLOWS:
ORDINANCE NO. 97-06
FRANCHISE AGREEMENT
THIS AGREEMENT is made and entered into as of this the 9th day of
December 1997, by and between the Town of Grifton, North Carolina, hereinafter
referred to as "Town" and Falcon Cable Media, hereinafter referred to as
"Falcon" located at Post Office Box 236, Holly Ridge, North Carolina 28445.
SECTION 1. GRANT OF FRANCHISE.
Falcon is hereby granted for itself and its successors and assignees,
subject to the terms and conditions of this Franchise Agreement, the
right, privilege, and authority to construct, operate, maintain, and
reconstruct a cable communications system within the streets, alleys,
and public ways of the Town for the purpose of providing cable
television service as defined by the N.C.G.S. 160A-319(b) and including
such other services as Falcon may legally provide on its cable
communications system, subject to current and future State, Federal,
and Local Laws and other regulations and the payment of any applicable
fees, services or other compensation directly or indirectly to the
Town. Falcon shall provide State-of-The-Art, Town-wide cable
communications system to the residents and institutions of the Town in
accordance with this Franchise Agreement and Ordinance No. 96-01,
entitled the "Town of Grifton's Communications Ordinance," (the
"Ordinance") adopted February 16, 1996, and incorporated into this
Franchise Agreement by reference.
SECTION 2. RIGHT OF TOWN TO ISSUE FRANCHISE.
Falcon acknowledges and accepts the legal right of the Town to issue
this Franchise Agreement.
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SECTION 3. EFFECTIVE DATE OF FRANCHISE AND ACCEPTANCE.
The effective date of this Franchise Agreement shall be 12-9, 1997,
subject to acceptance by Falcon which acceptance shall be received by
the Town not more than thirty (30) days after passage of the ordinance,
which shall incorporate this Franchise Agreement and the Ordinance.
SECTION 4. FRANCHISE TERM AND RENEWAL.
This Franchise Agreement shall take effect and be in full force from
and after the final passage hereof, subject to acceptance by the
Grantee as herein provided and the same shall continue in full force
and effect for a period of ten (10) years. Should the Grantee want to
renew this Agreement, the then federal, state or local rules for
renewal will be followed.
SECTION 5. SUPPLEMENT TO THE ORDINANCE. This Section supplements and updates
the Ordinance and takes precedence over the Ordinance:
(a) Definitions, changed and added:
3.28 changed to read: GROSS ANNUAL REVENUES means all receipts received directly
or indirectly by the Grantee, from providing cable communication services within
the Town of Grifton, including, but not limited to, basic Subscriber and
additional service monthly fees, pay cable fees, installation and reconnection
fees, leased channel fees, converter rentals, and personnel fees, and
advertising revenues; provided, however, that this shall not include any taxes
or copyright fees on services furnished by the Grantee herein imposed directly
upon any Subscriber or user by the state, local or other governmental unit.
3.55 added to read: STATE-OF-THE-ART means that the Grantee shall construct,
install and maintain its system in a manner which will continue to enable it to
add new services and associated equipment as they are developed, available and
when proved economically feasible and marketable to subscribers to the
reasonable satisfaction of the Grantee.
(b) Transfer of Ownership and Control:
Section 4.12.F of the Ordinance applies to initial construction of a system and
does not apply to upgrade/rebuild of an existing system. If any transfer takes
place during upgrade/rebuild of a current system, the Transferee must agree to
complete the agreed upon upgrade/rebuild of the current system, under the terms
of the Franchise Agreement, before transfer of the Franchise Agreement will be
approved by the Grantor, unless other terms are mutually agreed upon by the
Transferee and the Grantor.
(c) Construction and Technical Standards:
Section 7.2.B(1) of the Ordinance requires a 750 MHz system. In view of changing
technology, e.g. digital compression and future changes to compression of
signals, the requirement for a specific number of MHz's in a system is not
required. The upgrade/rebuild terms of the Franchise Agreement shall apply.
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Section 7.7 of the Ordinance requires monthly written updates on construction
progress. The referenced reports apply to initial construction of a cable
system. Reports on rebuild/upgrade of a current system will be as specified in
the Franchise Agreement.
Section 7.8.E of the Ordinance requires certain test and independent engineer
supervision of said tests. The intent of this requirement is that in cases where
the Grantee is unwilling or unable to resolve system-wide technical problems,
then an outside consulting engineer may be employed by the Grantee and at the
Grantee's sole expense, to solve the problem. The cost of the outside consulting
engineer would be treated as a cost of doing business under, the then,
applicable FCC rules on rate regulation.
(d) Service Provisions:
Section 8.4.E which requires the Grantee to provide information to the Grantor
identifying subscribers by name is deleted in its entirety. Federal Subscriber
Privacy Rules do not allow disclosure of any information concerning subscribers.
SECTION 6. GRANT OF FRANCHISES.
(a) The Town herein grants to the Grantee a nonexclusive, revocable-for-cause as
provided herein, Franchise Agreement to construct, operate and maintain a cable
communication system within the Town, said Franchise Agreement shall constitute
both a right and an obligation to provide the services of a cable communications
system, as regulated by the provisions of this agreement.
(b) The franchise service area shall be the entire incorporated area of the
Town, as now stands or as annexed.
SECTION 7. ACCEPTANCE.
(a) By accepting this Franchise Agreement, the Grantee agrees to be bound by all
the terms and conditions in this Franchise Agreement and the Ordinance. The
Grantee also agrees to provide all services within the franchise area, with the
exception of experimental trials of new services on a limited basis.
(b) By accepting this Franchise Agreement, the Grantee acknowledges that it does
so relying upon its own investigation and understanding of the power and
authority of the Town in connection with the system and this Franchise Agreement
and the Ordinance.
(c) By accepting the Franchise Agreement, the Grantee acknowledges that it is
has not been induced to enter into this Franchise Agreement by any understanding
or promise or other statement not expressed therein, whether oral or written,
concerning any term or condition of this Franchise Agreement, regardless of
whether such statement was made by or on behalf of the Town.
(d) By accepting this Franchise Agreement, the Grantee acknowledges that it has
carefully read the terms and conditions of the Franchise Agreement and the
Ordinance.
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SECTION 8. FRANCHISE FEES.
During the term of this Franchise Agreement, the Grantee shall pay to
the Town for use of its streets, public places, and other facilities, as well as
the maintenance, improvements, and supervision thereof, an annual franchise fee
in the amount of five (5) percent, but the Grifton Board of Commissioners
reserves the right to increase the annual fee up to that legally allowed by law,
upon passage of an ordinance including and stating the franchise fee rate and
upon proper notification of the Grantee. The franchise fee is stated as a
percentage of the annual Gross Subscriber Revenues received by the Grantee from
operations conducted within the Town. This payment shall be in addition to any
other tax or payment owed to the Town by the Grantee.
SECTION 9. PERFORMANCE EVALUATION.
In accordance with Section 5.4.B of the Ordinance and at the five year
anniversary of this Franchise Agreement, a specific review may be scheduled, in
open Board session, to discuss the telecommunications needs of the community,
advances in technology or other mutually agreeable items which may need to be
discussed.
SECTION 10. SERVICES TO SUBSCRIBERS AND USERS.
(a) The Grantee shall provide, when standard installation is possible, basic
cable and cable programming service, super station package and one (1) free
outlet to each of the following public facilities: all courthouses, libraries,
police and fire stations, rescue units, municipal office buildings and schools.
The Grantee shall notify the Town in writing when standard installation is not
possible. No monthly service fee shall be charged for the first outlet
installed. The Grantee shall provide service to new construction hereafter for
the above public facilities, provided they are within the standard installation
parameters. Installation costs and fees for additional outlets and equipment
shall be charged to the Town at Grantee's prevailing rates.
(b) The Grantee shall, when technically feasible, provide and maintain, at a
minimum, at least one non-commercial community channel available on a
first-come, first-served, nondiscriminatory basis, at no cost to users.
(c) Community Channel.
(1) Grantee, or its successor, shall provide a Community Channel to the
Town, consisting of Educational and Governmental Programming and Local
Origination Programming. Until such time as demand requires a separate channel
for education and a separate channel for government, both parties to this
Agreement agree to the combination of the channels. The determination on the
need for separate channels will be mutually agreed upon by both parties.
(2) Falcon, will provide necessary facilities, personnel and
administrative support for operation of the Community Channel.
(3) Grantee to contribute necessary equipment and provide the
facilities to broadcast on the Community Channel the following: character
generated bulletin board with items of community interest as provided by the
Town; pre-edited video of a community/education nature provided by the Board of
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Education or their representative and the Town; other items of interest as
provided by the Board of Education and the Town as may be agreed upon, from
time-to-time, by Grantee and the Board of Education and the Town.
(4) Grantee shall cooperate with the Town staff in providing
promotional announcements on the availability of Community Programming.
(5) Grantee shall cooperate with school and government officials to
maximize use and benefit from Educational and Governmental Programming.
(6) Grantee agrees to make a one-time, lump-sum grant to the Town in
the amount of $700.00 for such cable-related purposes as the Town may from
time-to-time determine for support of the Community Channel. Both parties to
this Agreement agree that this grant money will not be passed on to the
subscribers in either a direct pass through or as a rate adjustment.
(d) In accordance with Section 8.4.A and Section 9.1.A, the following takes
precedence: The Grantee shall establish and maintain a business office and
repair facility for the purposes stated in Section 8.4.A., within the system
area.
(e) Emergency use of facilities. In accordance with Section 8.2.B of the
Ordinance, the Grantee shall provide emergency alert capability pursuant the
1992 Cable Act Section 16 (b), Communications Act of 1934 Section 624 (g), 47
U.S.C. 544(g), as amended.
(f) Interconnectivity. In accordance with Section 5.3.D, of the Ordinance, the
Grantee shall make every effort to interconnect its cable system to any other
cable system within the franchise area, provided however that all parties agree
to the interconnection and it is economically feasible, legal under the then
current law and marketable for all parties concerned.
(g) Performance Bond. In accordance with Section 6.1.A, of the Ordinance, the
Grantee shall obtain and maintain during the entire term of the Franchise
Agreement and any extensions and renewals thereof, at its cost and expense, and
file with the Town, a corporate surety bond in the amount of $25,000. The bond
will be provided within forty-five (45) days after the effective date of the
Franchise Agreement. Failure to timely obtain, file and maintain a bond shall
constitute a substantial violation of this Franchise Agreement.
(h) System Upgrade. In accordance with Section I of the Ordinance, the following
outlines the modernization of the cable system. Grantee will use the most
economically and technically feasible technology to upgrade the system to a
State-of-The-Art system. This may include a combination of technologies
including, but not limited to, fiber optic and coaxial technology, and a
combination of analog and digital technology depending on the application. The
upgraded system will meet or exceed all applicable FCC technical standards.
Grantee shall complete the upgrade of the system serving all areas of the Town
with a minimum of 60 channel capacity. Grantee will meet, as scheduled, on a
quarterly basis with the franchise authority to provide an update on the system
upgrade schedule. The upgrade will be completed in two phases which will be
completed within forty-eight (48) months from the effective date of this
Agreement.
(1) Design/Make-Ready Phase. This Phase includes the base mapping and
electronic design used to obtain the necessary permits and agreements for actual
construction of the system. Completion of this
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phase is estimated to require twelve (12) to twenty-four (24) months from the
effective date of this Agreement and the following shall be accomplished:
a. Complete Mapping of the system.
b. Obtain necessary permits from all affected
agencies and complete negotiations for pole
attachments.
c. Complete necessary action to provide
material and equipment for the construction
of the upgrade project, as per Falcon's
inventory control system.
(2) Construction Phase. This Phase includes the actual construction of
the upgrade project. This Phase will be completed within eighteen (18) to
twenty-four (24) months of the completion of the Design/Make-Ready Phase. During
the Construction Phase the following will be accomplished: upgrade electronics,
as needed; inventory and replace, as needed, all taps; replace coaxial cable, as
needed, to meet the 60 channel capacity.
(3) Snow Hill Headend will be upgraded to deliver a minimum of 60
channel capacity. Grantee shall comply with the FCC regulations and requirements
for the transmission of broadcast digital television signals on its cable
system. When required by FCC ruling Grantee shall provide a cable system capable
of transmitting broadcast digital signals with no distortion.
SECTION 11. CUSTOMER SERVICES.
Grantee will meet the customer service standards as established in Appendix A,
as may be amended from time-to-time.
SECTION 12. REMEDIES.
Should there be any unresolved issues pertaining to the performance of the
Grantee between the Town and Grantee, the Grantee may recover material and
liquidated damages under the provisions of this Franchise Agreement, as well as
all provisions of the Act.
(a) Schedule of liquidated damages. Because Grantee's failure to comply
with certain material provisions of this Agreement will result in injury to the
Town or to subscribers, and because it will be difficult to estimate the extent
of such injury, the Town and Grantee hereby agree that liquidated damages and
penalties stated below represent both parties best estimate of the damages
resulting from the specified injury. To maintain that estimate, the parties
agree that the liquidated damage amount is in 1997 dollars and shall be
increased each year by the increase in the US City Average of the Consumer Price
index, if inflation from the date of this Agreement has exceeded twenty (20)
percent.
(b) Violations. For the violation of any of the following, the Town
will notify Grantee in writing of the violation. The Town shall provide Grantee
with detailed written notice of any Agreement violation upon which it proposes
to take action, and a ninety (90) day period within which Grantee may
demonstrate that a violation does not exist or to cure an alleged violation or,
if the violation cannot be corrected in 90 days, to submit a plan satisfactory
to the Town to correct the violation. If an alleged
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violation is proven to exist, and no cure or action on a plan acceptable to the
Town has been received by the Town within ninety (90) days, such liquidated
damages shall be chargeable to the performance bond as set forth in this
Agreement if not tendered by Grantee within thirty (30) days of notification by
the Town. Grantee may petition the Town Board for relief for just cause. The
imposition of liquidated damages shall not preclude the Town from exercising the
other enforcement provisions of this Agreement, including revocation, or other
statutory or judicially imposed penalties. No penalty shall be assessed if the
violation occurs without fault of the Grantee or occurs as a result of
circumstances beyond its control. Liquidated damages may be imposed as follows:
(1) For failure to materially complete construction or
extend service in accordance with this Agreement:
$100 for each day the violation continues;
(2) For failure to materially comply with requirements
for Community Channel: $100/ for each day the
violation continues;
(3) For transferring the Agreement without approval: One
time penalty of $2,500;
(4) For violation of the customer service standards
measured on an individual basis: $50 per violation.
For violations of applicable customer service
standards for which the operator's compliance is
measured in annual terms of its response to
individual customers, $1,500.00 for any period during
which it fails to meet applicable performance
standards;
(5) For failure to provide data, documents, record or
reports or any other information required by this
Franchise Agreement: $50.00/ for each day the
violation continues;
(6) For failure to test, analyze and report on the
performance of the system following a request by the
Town: $50.00/ for each day the violation continues.
SECTION 13. WAIVER.
The failure of the Town at any time to require performance by Falcon of any
provision hereof shall in no way affect the right of the Town hereafter to
enforce the same. Nor shall the waiver by the Town of any breach of any
provision hereof be taken to be a waiver of any succeeding breach of such
provision, or as waiver of the provision itself.
SECTION 14. CUMULATIVE PROVISIONS.
The rights and remedies reserved to the Town by this Franchise Agreement are
cumulative and shall be in addition to and not in derogation of any other rights
or remedies which the Town may have with respect to the subject matter of this
Franchise Agreement, and a waiver thereof at any time shall have no effect on
the enforcement of such rights or remedies at a future time.
SECTION 15. NO JOINT VENTURE.
Nothing herein shall be deemed to create a joint venture or principle-agent
relationship between the parties,
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and neither party is authorized to, nor shall either party act toward third
persons or the public, in any manner which would indicate any such relationship
with the other.
SECTION 16. ENTIRE AGREEMENT.
This agreement and all attachments hereto, as incorporated herein, represent the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof, supersede all prior oral negotiations between the
parties, and can be amended, supplemented, modified, or changed only by a
written document executed by the parties.
SECTION 17. FORCE MAJEURE.
Notwithstanding any provision of the contrary contained herein, neither the Town
nor the Grantee shall be held liable for or suffer any penalty or detriment for,
any failure to comply with any provision of this Franchise Agreement if such
failure to comply accrues from any act of God or any other condition not within
the reasonable control of such non-complying person; provided, however, that
this provision shall not apply to Grantee's financial obligations hereunder.
SECTION 18. NOTICES.
All notices and other communications hereunder shall be in writing and shall be
deemed to have been given on the date of actual delivery, by registered or
certified mail, return receipt request, postage prepaid. The address for service
of notice to the Grantee shall be addressed to Falcon Cable Media, Post Office
Box 236, Holly Ridge, North Carolina 28445. Notices to the Town shall be
addressed to the Town Clerk, Town of Grifton, Post Office Box 579, Grifton,
North Carolina 28530. Either the Town or the Grantee may change address to which
all notices shall be sent by addressing a notice of such change in the manner
provided in this section.
ADOPTED AND EFFECTIVE THIS THE 9TH DAY OF DECEMBER 1997, after being
introduced, read and adopted during the two regularly scheduled meetings of
12-3, 1997 and 12-9, 1997.
FOR THE TOWN OF GRIFTON
/s/ Ralph L. Thaxton
---------------------------
Mayor
Town Seal
ATTEST: Approved as to legal form and sufficiency:
/s/ Patricia H. Bryan /s/ Russell Houston
------------------------ --------------------------------
Town Clerk Town Attorney
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FOR FALCON CABLE MEDIA:
BY: /s/ Howard Gan
----------------------------------
Vice President
DATE: 1/20/98
--------------------------------
ATTEST: BY: /s/ Laura Dainko
----------------------------------
TITLE: Admin Asst
--------------------------------
DATE: 1/20/98
--------------------------------
Notary Certification:
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APPENDIX A
Customer Service Standards
1. Subscriber Privacy
In accordance with the Act, the company shall abide by the provisions
of the Act; and no less than annually, provide notice in the form of a
separate written statement to subscribers the provision of the Act.
2. Employee Identification
When calling in person, on subscribers or other residents, all
employees or authorized representatives of the Grantee, including
subcontractors, are required to display an employee identification card
with their name, photograph and signature, and a telephone number that
can be used for verification of the representative capacity with the
Grantee. All vehicles, including subcontractors, shall display the name
of the cable-telecommunications company.
3. Office and Telephone Availability
A. Knowledgeable, qualified company representatives shall be
available to respond to customer telephone inquiries Monday
through Friday during normal business hours. Additionally,
based on community needs, system shall staff telephone for
supplemental hours on weekdays and/or weekends.
B. Under normal operating conditions, telephone answer time by a
customer service representative, including wait time required
to transfer the call, shall not exceed 30 seconds. This
standard shall be met no less than seventy-five percent of the
time measured on an annual basis.
C. Under normal operating conditions, the customer shall receive
a busy signal less than three percent of the total time that
the cable office is open for business. This standard shall be
met no less than seventy-five percent of the time measured on
an annual basis.
D. Customer service center and bill payment locations shall be
open for transactions Monday through Friday during normal
business hours.
E. Grantee shall be responsible for adopting, publishing and
implementing subscriber complaint procedures. The procedures
shall be designed to resolve subscriber complaints in a timely
and satisfactory manner; to develop sensitivity and
responsiveness to subscriber needs on the part of the
franchise management; and to improve the quality and
dependability of services to subscribers by the Grantee.
Established Complaint Procedures shall include specific
provisions for registering subscriber repair service
complaints received by telephone twenty-four (24) hours each
day and seven (7) days each week; for permitting subscriber
repair service complaints to be received at the Grantee's
business office from 8:00 a.m. until 5:00 p.m. on Monday
through Friday of each week; and the address of the Grantee's
business office.
4. Installations, Outage and Service Calls
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Under normal operating conditions, each of the following standards
shall be met no less than 75% of the time measured on an annual basis.
A. Standard installation, excluding underground, shall be
performed within seven business days after an order has been
placed. "Standard" installations are up to 188 feet from the
existing distribution system. This standard shall be met
seventy-five percent of the time.
B. Excluding those situations beyond the control of the Grantee,
the Grantee shall respond to system-wide service interruptions
promptly, and no later than 6 hours after the interruption
becomes known to the Grantee. Grantee must begin actions to
correct service problems unrelated to outages the next
business day after notification to the Grantee of the service
problem.
C. The appointment window alternatives for installations, service
calls and other installation activities shall be (a) morning,
(b) afternoon, or (c) all day during normal business hours.
Additionally, based upon community needs, the Grantee shall
schedule supplemental hours during which appointments can be
set.
D. If, at any time, an installer or technician is running late,
an attempt to contact the customer shall be made and the
appointment rescheduled as necessary at a time which is
convenient for the customer.
E. The Grantee shall render efficient service, make repairs
promptly and interrupt service only for good cause and for the
shortest time possible.
F. Grantee shall receive customer calls twenty-four (24) hours
per day and respond to single customer outage complaint calls
until 7:00 p.m. on normal business days. The intent is that if
a single subscriber suffers a service interruption, Falcon
Cable will take action to correct the interruption the same
day until 7 p.m. or if after 7 p.m., Falcon will correct the
problem the next business day. After 7:00 p.m. on any day,
trained technicians shall respond to calls if three (3) or
more complaints are received by subscribers served in a common
area.
5. Communication, Statements, Refunds and Credits
A. The cable company shall provide written information in each of
the following areas at the time of installation and at any
future time upon request (this standard shall be met no less
than ninety-five percent of the time measured on an annual
basis):
- products and services offered;
- prices and service options;
- installation and service policies;
- how to use the cable service
B. Statements (billing) shall be clear, concise and
understandable.
The itemized charges identified on the subscriber bill as the
total charge for cable service must include all fees and
costs.
C. Refund checks shall be issued promptly, but no later than the
earlier of 45 days or the customer's next billing cycle
following the resolution of the request, and the return of the
equipment supplied by the cable company. This standard shall
be measured on an annual basis and shall be met ninety-five
percent of the time.
D. Customers shall be notified in writing a minimum of 30 days in
advance of any rate or channel change, provided the change is
within the control of the Grantee. This performance shall be
measured on an individual basis and shall be met one hundred
percent of the time.
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E. Outage credit granted to subscribers as follows:
Should Grantee fail to correct a service problem,
pertaining to a service interruption, within 24 hours
after having been provided notice, upon request of the
subscriber, Grantee shall credit 1/30th of the monthly
charge for the affected tier or premium service program to
the subscriber for each 24-hour period or fraction thereof
following the first 24-hour period during which the
subscriber experiences reduced service. This performance
is measured on an individual basis.
6. Complaint - Appeals
A. Upon notification by a subscriber of an unresolved complaint,
the Town Manager shall determine the facts of the complaint by
obtaining information from the subscriber and the Grantee; and
shall act to resolve the complaint in a manner consistent with
the authority granted the Town Manager by the Board.
B. The Town reserves the right to regulate the rates to the
maximum extent allowed by law, to include the filing of
complaints at the FCC, as may be permitted by applicable law.
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT JUNE 30, 1998, AND THE STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 625,400
<SECURITIES> 0
<RECEIVABLES> 87,200
<ALLOWANCES> 7,400
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,287,000
<DEPRECIATION> 10,765,000
<TOTAL-ASSETS> 4,957,900
<CURRENT-LIABILITIES> 1,194,900
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,957,900
<SALES> 0
<TOTAL-REVENUES> 2,647,300
<CGS> 0
<TOTAL-COSTS> 2,002,600
<OTHER-EXPENSES> (11,800)
<LOSS-PROVISION> 87,800
<INTEREST-EXPENSE> 55,600
<INCOME-PRETAX> 600,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 600,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 600,900
<EPS-PRIMARY> 19.87
<EPS-DILUTED> 0
</TABLE>
