<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 1995
--------------
/ / 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: 0-13171
Cable TV Fund 11-D, LTD.
- - -----------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-0917842
- - -----------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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Address of principal executive office
(303) 792-3111
-----------------------------------
Registrant's telephone number
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
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CABLE TV FUND 11-D, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1995 1994
------ ---------------- ---------------
<S> <C> <C>
INVESTMENT IN CABLE TELEVISION JOINT VENTURE $ 2,521,017 $ 2,499,225
=========== ===========
PARTNERS' CAPITAL (DEFICIT)
---------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital $ 1,000 $ 1,000
Distributions (8,005,517) (8,005,517)
Accumulated earnings 7,827,825 7,827,607
----------- -----------
(176,692) (176,910)
------------ -----------
Limited Partners-
Net contributed capital (50,000 units outstanding
at March 31, 1995 and December 31, 1994) 21,598,038 21,598,038
Distributions (49,016,548) (49,016,548)
Accumulated earnings 30,116,219 30,094,645
----------- -----------
2,697,709 2,676,135
----------- -----------
Total partners' capital (deficit) $ 2,521,017 $ 2,499,225
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE> 3
CABLE TV FUND 11-D, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------------------
1995 1994
---------- ------------
<S> <C> <C>
EQUITY IN NET INCOME OF CABLE
TELEVISION JOINT VENTURE $21,792 $47,306
------ ------
NET INCOME $21,792 $47,306
====== ======
ALLOCATION OF NET INCOME:
General Partner $ 218 $ 473
====== ======
Limited Partners $21,574 $46,833
====== ======
NET INCOME PER LIMITED PARTNERSHIP UNIT $ .43 $ .94
======= ======
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 50,000 50,000
====== ======
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
<PAGE> 4
CABLE TV FUND 11-D, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-------------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21,792 $ 47,306
Adjustments to reconcile net income to
net cash provided by operating activities:
Equity in net income of cable
television joint venture (21,792) (47,306)
---------- -----------
Net cash provided by operating activities - -
---------- -----------
Cash, beginning of period - -
---------- -----------
Cash, end of period $ - $ -
========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ -
========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements
4
<PAGE> 5
CABLE TV FUND 11-D, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC Requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Cable TV Fund 11-D, Ltd.
(the "Partnership") at March 31, 1995 and December 31, 1994 and its Statements
of Operations and Cash Flows for the three month periods ended March 31, 1995
and 1994. Results of operations for these periods are not necessarily
indicative of results to be expected for the full year.
(2) Jones Intercable, Inc., (the "General Partner"), a publicly held
Colorado corporation manages the Partnership and Cable TV Joint Fund 11 (the
"Venture") in which the Partnership owns an approximate 47 percent interest,
and receives a fee for its services equal to 5 percent of the gross revenues of
the Venture, excluding revenues from the sale of the cable television systems
or franchises. The Partnership owns no properties directly, and it holds an
interest in a cable television system only through its investment in the
Venture. Management fees paid by the Venture and attributable to the
Partnership for the three month periods ended March 31, 1995 and 1994
(reflecting the Partnership's approximate 47 percent interest in the Venture)
were $20,016 and $19,018, respectively.
The Venture reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid to corporate personnel, rent, data processing
services and other corporate facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Allocations of personnel costs are
primarily based on actual time spent by employees of the General Partner with
respect to each partnership managed. Remaining overhead costs are allocated
based upon revenues of the Partnership as a percentage of total revenues of
owned and managed cable television systems of the General Partner. Systems
owned by the General Partner and all other systems owned by partnerships for
which Jones Intercable, Inc., is the general partner are also allocated a
proportionate share of these expenses. The General Partner believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Reimbursements to the General Partner paid by the Venture and
attributable to the Partnership for allocated overhead and administrative
expenses for the three month periods ended March 31, 1995 and 1994 (reflecting
the Partnership's approximate 47 percent interest in the Venture) were $34,527
and $32,376, respectively.
(3) On June 29, 1990, the Venture completed the sale of all of its
Wisconsin cable television systems, except for the system serving the City of
Manitowoc (the "Manitowoc System"). The Manitowoc System was not sold because
the City of Manitowoc (the "City") did not consent to the transfer of the
franchise. The City of Manitowoc franchise contains a provision that the City
claimed allowed the City to acquire the Manitowoc System upon expiration of the
franchise. On April 9, 1991, the Venture took legal action, seeking a
declaration as to whether the buy-out right was enforceable under Federal law.
In October 1993, the City and the Venture settled the legal action. In the
settlement, the City conceded that its buy-out right was not applicable in the
event the franchise is renewed, and represented to the Venture that it knew of
no reason for non-renewal of the franchise. The City also agreed that the term
of the renewal franchise would be 12 years and that the applicable franchise
fee would be 5 percent. The Venture paid the City $1,850,000, which will be
returned, with interest, in the event that the City does not renew the
franchise. If the franchise is renewed, the $1,850,000 will be amortized over
the life of the franchise. The franchise renewal process has begun and the
General Partner expects that it will be completed during 1995.
5
<PAGE> 6
4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------------ ---------------
<S> <C> <C>
ASSETS
------
Cash and accounts receivable $ 2,425,213 $ 2,521,713
Investment in cable television properties 2,657,774 2,724,042
Other assets 1,859,723 1,853,355
------------- -------------
Total assets $ 6,942,710 $ 7,099,110
============= =============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 23,013 $ 26,385
Payables and accrued liabilities 275,378 474,880
Partners' contributed capital 45,000,000 45,000,000
Distributions (118,914,493) (118,914,493)
Accumulated earnings 80,558,812 80,512,338
------------- -------------
Total liabilities and partners' capital $ 6,942,710 $ 7,099,110
============== =============
</TABLE>
6
<PAGE> 7
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
Revenues $ 853,728 $ 811,158
Operating expenses (583,736) (481,487)
Management fees and allocated overhead from
Jones Intercable, Inc. (116,322) (109,605)
Depreciation and amortization (139,565) (130,490)
-------- --------
Operating income 14,105 89,576
Interest expense (6,284) (4,297)
Interest income 38,046 15,475
Other, net 607 133
-------- --------
Net income $ 46,474 $ 100,887
======== ========
</TABLE>
Management fees and reimbursements for general and administrative
expenses paid to Jones Intercable, Inc. by the Venture totaled $42,686 and
$73,636, respectively, for the three months ended March 31, 1995 and $40,558
and $69,047, respectively, for the three months ended March 31, 1994.
7
<PAGE> 8
CABLE TV FUND 11-D, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership owns an approximate 47 percent interest in Cable TV
Joint Fund 11 (the "Venture".) The investment in this cable television joint
venture is accounted for under the equity method. When compared to the
December 31, 1994 balance, this investment has increased by $21,792 from
$2,499,225 at December 31, 1994 to $2,521,017 at March 31, 1995. This increase
represents the Partnership's proportionate share of income generated by the
Venture during the first quarter of 1995.
On June 29, 1990, the Venture completed the sale of all of its
Wisconsin cable television systems, except for the system serving the City of
Manitowoc (the "Manitowoc System"). The Manitowoc System was not sold because
the City of Manitowoc (the "City") did not consent to the transfer of the
franchise. The City of Manitowoc franchise contains a provision that the City
claimed allowed the City to acquire the Manitowoc System upon expiration of the
franchise. On April 9, 1991, the Venture took legal action, seeking a
declaration as to whether the buy-out right was enforceable under Federal law.
In October 1993, the City and the Venture settled the legal action. In the
settlement, the City conceded that its buy-out right was not applicable in the
event the franchise is renewed, and represented to the Venture that it knew of
no reason for non-renewal of the franchise. The City also agreed that the term
of the renewal franchise would be 12 years and that the applicable franchise
fee would be 5 percent. The Venture paid the City $1,850,000, which will be
returned, with interest, in the event that the City does not renew the
franchise. If the franchise is renewed, the $1,850,000 will be amortized over
the life of the franchise. The franchise renewal process has begun and the
General Partner expects that it will be completed during 1995.
During the first three months of 1995, the Venture expended
approximately $48,000 for capital additions in the Manitowoc System. These
capital additions were for various enhancements to maintain the value of the
system and were funded from cash generated from operations. Anticipated
capital expenditures for the remainder of 1995 are approximately $225,000.
These expenditures will be for various enhancements to maintain the value of
the system. It is expected that these capital expenditures will be funded from
cash on hand and cash generated from operations.
The Venture had no bank debt outstanding at March 31, 1995.
The Venture has sufficient liquidity and capital resources, including
cash on hand and its ability to generate cash from operations, to meet its
anticipated needs.
Regulation and Legislation
Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally imposes a greater degree of regulation on the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States, including the
Manitowoc System, are subject to rate regulation of basic cable services. In
addition, the 1992 Cable Act allows the FCC to regulate rates for non-basic
service tiers other than premium services in response to complaints filed by
franchising authorities and/or cable subscribers. In April 1993, the FCC
adopted regulations governing rates for basic and non-basic services. The
FCC's rules became effective on September 1, 1993. In compliance with these
rules, the Partnership reduced rates charged for certain regulated services
effective September 1, 1993.
On February 22, 1994, however, the FCC adopted several additional rate
orders including orders which revised its earlier-announced regulatory scheme
with respect to rates and established interim cost-of-service regulations. The
FCC's February 22, 1994 regulations generally require rate reductions, absent a
successful cost-of-service showing, of 17 percent of September 30, 1992 rates,
adjusted for inflation, channel modifications, equipment costs, and increases
in programming costs. The new regulations became effective on May 15, 1994,
but operators could elect to defer rate reductions to July 14, 1994, so long as
they made no changes in their rates and did not restructure service offerings
between May 15 and July 14.
8
<PAGE> 9
The Partnership has complied with the February 1994 benchmark
regulations and reduced rates in its Manitowoc System in July 1994.
RESULTS OF OPERATIONS
All of the Partnership's operations are generated through its
approximate 47 percent interest in the Venture. Revenues of the Venture
increased $42,570, or approximately 5 percent, from $811,158 for the three
month period ended March 31, 1994 to $853,728 for the comparable 1995 period.
An increase in the subscriber base primarily accounted for the increase in
revenues. The number of basic subscribers increased 1,068, or approximately 11
percent, from 9,939 at March 31, 1994 to 11,007 at March 31, 1995. Premium
service subscriptions increased 1,558, or approximately 29 percent, from 5,427
at March 31, 1994 to 6,985 at March 31, 1995. No other individual factor
contributed significantly to the increase in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expense in the Manitowoc System increased $102,249, or
approximately 21 percent, from $481,487 for the first three months of 1994 to
$583,736 for the comparable 1995 period. Operating expense represented 68
percent of revenue for the three month period ended March 31, 1995 and 59
percent of revenue for the three month period ended March 31, 1994. The
increase in operating expense was due to the increases in programming fees and
marketing related costs, which were partially offset by decreases in
advertising sales expense and copyright fees. No other individual factor
significantly affected the increase in operating expenses. Management fees and
allocated overhead from the General Partner increased $6,717, or approximately
6 percent, from $109,605 for the first three months of 1994 to $116,322 for the
comparable 1995 period. The increase for the three month period was due to the
increase in revenues, upon which such fees and allocations are based, as well
as an increase in expenses allocated from the General Partner. The General
Partner has experienced increases in expenses, including personnel costs and
reregulation costs, a portion of which is allocated to the Venture.
Depreciation and amortization expense increased $9,075, or approximately 7
percent, from $130,490 for the first three months of 1994 to $139,565 for the
comparable 1995 period due capital additions in 1994.
Operating income decreased $75,471, or approximately 84 percent, from
$89,576 for the first three months of 1994 to $14,105 for the comparable 1995
period due to increases in operating expenses, management fees and allocated
overhead from the General Partner and depreciation and amortization expense
exceeding the increase in revenues. Operating income before depreciation and
amortization decreased $66,396, or approximately 30 percent, from $220,066 for
the three months ended March 31, 1994 to $153,670 for the similar period in
1995. This decrease is due to the increases in operating expense and
management fees and allocated overhead from the General Partner exceeding the
increase in revenues. The decrease in operating income before depreciation and
amortization reflects the current operating environment of the cable television
industry. The FCC rate regulations under the 1992 Cable Act have caused
revenues to increase more slowly than otherwise would have been the case. In
turn, this has caused certain expenses which are a function of revenue, such as
franchise fees, copyright fees and management fees to increase more slowly than
otherwise would have been the case. However, other operating costs such as
programming fees, salaries and benefits, and marketing costs as well as other
costs incurred by the General Partner, which are allocated to the Venture,
continue to increase at historical rates. This situation has led to reductions
in operating income before depreciation and amortization as a percent of
revenue ("Operating Margin"). Such reductions in Operating Margins may
continue in the near term as the Venture and the General Partner incur cost
increases due to, among other things, programming fees, reregulation and
competition, that exceed increases in revenue. The General Partner will
attempt to mitigate a portion of these reductions through (a) new service
offerings; (b) product re-marketing and re-packaging; and (c) marketing efforts
directed at non-subscribers.
Interest expense for the Venture increased $1,987, or approximately 46
percent, from $4,297 for the first three months of 1994 to $6,284 for the
comparable 1995 period due to higher outstanding balances on interest bearing
obligations. Net income of the Venture decreased $54,413, or approximately 54
percent, from $100,887 for the first three months of 1994 to $46,474 for the
comparable 1995 period primarily due to the decrease in operating income.
9
<PAGE> 10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
10
<PAGE> 11
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.
CABLE TV FUND 11-D
BY: JONES INTERCABLE, INC.
General Partner
By:/S/ Kevin P. Coyle
-----------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: May 12, 1995
11
<PAGE> 12
INDEX TO EXHIBITS
Exhibit Description Page
- - ------- ----------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,521,017
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 2,521,017
<TOTAL-LIABILITY-AND-EQUITY> 2,521,017
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (21,792)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21,792
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,792
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,792
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
