<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 September 30, 1997
---------------------------
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 0-14508
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Enstar Income Program II-1, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1628877
- ------------------------------- ----------------------
(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
------------------
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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 II-1, L.P.
CONDENSED BALANCE SHEETS
==============================================
<TABLE>
<CAPTION>
December 31, September 30,
1996* 1997
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 2,849,600 $ 2,104,400
Accounts receivable, less allowance of $4,700 and
$9,800 for possible losses 75,000 41,800
Prepaid expenses and other assets 29,200 338,800
Property, plant and equipment, less accumulated
depreciation and amortization of $4,145,800 and $4,334,100 1,891,100 3,283,100
Franchise cost, net of accumulated
amortization of $17,500 and $24,400 64,600 62,700
Deferred charges, net 8,900 7,800
----------- -----------
$ 4,918,400 $ 5,838,600
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
LIABILITIES:
Accounts payable $ 229,800 $ 410,100
Due to affiliates 173,900 210,400
----------- -----------
TOTAL LIABILITIES 403,700 620,500
----------- -----------
COMMITMENTS AND CONTINGENCIES
PARTNERSHIP CAPITAL (DEFICIT):
General partners (28,800) (21,700)
Limited partners 4,543,500 5,239,800
----------- -----------
TOTAL PARTNERSHIP CAPITAL 4,514,700 5,218,100
----------- -----------
$ 4,918,400 $ 5,838,600
=========== ===========
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
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<PAGE> 3
ENSTAR INCOME PROGRAM II-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
==============================================
<TABLE>
<CAPTION>
Unaudited
----------------------------
Three months ended
September 30,
----------------------------
1996 1997
----------- -----------
<S> <C> <C>
REVENUES $ 699,600 $ 754,000
----------- -----------
OPERATING EXPENSES:
Service costs 199,300 174,200
General and administrative expenses 66,700 61,000
General Partner management fees
and reimbursed expenses 100,600 116,900
Depreciation and amortization 59,500 86,600
----------- -----------
426,100 438,700
----------- -----------
OPERATING INCOME 273,500 315,300
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 31,000 31,500
Interest expense -- (4,700)
Gain on sale of cable assets 2,000 --
----------- -----------
33,000 26,800
----------- -----------
NET INCOME $ 306,500 $ 342,100
=========== ===========
Net income allocated to General Partners $ 3,100 $ 3,400
=========== ===========
Net income allocated to Limited Partners $ 303,400 $ 338,700
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 10.14 $ 11.31
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,936 29,936
=========== ===========
</TABLE>
See accompanying notes to condensed inancial statements.
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<PAGE> 4
ENSTAR INCOME PROGRAM II-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
==============================================
<TABLE>
<CAPTION>
Unaudited
-----------------------------
Nine months ended
September 30,
-----------------------------
1996 1997
----------- -----------
<S> <C> <C>
REVENUES $ 2,015,800 $ 2,240,200
----------- -----------
OPERATING EXPENSES:
Service costs 589,600 606,900
General and administrative expenses 237,300 180,000
General Partner management fees
and reimbursed expenses 280,000 347,400
Depreciation and amortization 241,400 227,300
----------- -----------
1,348,300 1,361,600
----------- -----------
OPERATING INCOME 667,500 878,600
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 89,000 105,800
Interest expense (1,400) (10,700)
Gain on sale of cable assets 2,700 --
Other income -- 13,200
----------- -----------
90,300 108,300
----------- -----------
NET INCOME $ 757,800 $ 986,900
=========== ===========
Net income allocated to General Partners $ 7,600 $ 9,900
=========== ===========
Net income allocated to Limited Partners $ 750,200 $ 977,000
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 25.06 $ 32.64
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 29,936 29,936
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE> 5
ENSTAR INCOME PROGRAM II-1, L.P.
STATEMENTS OF CASH FLOWS
==============================================
<TABLE>
<CAPTION>
Unaudited
-----------------------------
Nine months ended
September 30,
-----------------------------
1996 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 757,800 $ 986,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 241,400 227,300
Gain on sale of cable assets (2,700) --
Increase (decrease) from changes in:
Accounts receivable, prepaid expenses and other assets (33,800) (276,400)
Accounts payable and due to affiliates 228,200 216,800
----------- -----------
Net cash provided by operating activities 1,190,900 1,154,600
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (506,800) (1,605,800)
Increase in intangible assets (13,700) (10,500)
Proceeds from sale of property, plant and equipment 11,000 --
----------- -----------
Net cash used in investing activities (509,500) (1,616,300)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (283,500) (283,500)
----------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 397,900 (745,200)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 2,657,300 2,849,600
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 3,055,200 $ 2,104,400
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
-5-
<PAGE> 6
ENSTAR INCOME PROGRAM II-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
==============================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
and nine months ended September 30, 1997 and 1996 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 nine months ended September 30, 1997 are not
necessarily indicative of results for the entire year.
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
The Partnership has a management and service agreement with a wholly
owned subsidiary of the Corporate 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 $37,700
and $112,000 for the three and nine months ended September 30, 1997.
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 Corporate General Partner and its subsidiary are
charged a proportionate share of these expenses. 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 $79,200 and
$235,400 for the three and nine months ended September 30, 1997. Management fees
and reimbursed expenses due the Corporate General Partner are non-interest
bearing.
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 Corporate General Partner could negotiate
for such programming services for the 15 partnerships managed by the Corporate
General Partner as a group. The Partnership recorded programming fee expense of
$149,100 and $452,300 for the three and nine months ended September 30, 1997.
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 Partners. The General Partners do not own units
of partnership interest in the Partnership, but rather hold a participation
interest in the income, losses and distributions of the Partnership.
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<PAGE> 7
ENSTAR INCOME PROGRAM II-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 programming service tiers will be phased out
altogether in 1999. The regulatory environment will continue to change pending,
among other things, the outcome of legal challenges and FCC rulemaking and
enforcement activity in respect of the 1992 Cable Act and the 1996 Telecom Act.
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, 1996 for additional information regarding
such matters and the effect thereof on the Partnership's business.
RESULTS OF OPERATIONS
The Partnership's revenues increased from $699,600 to $754,000, or by
7.8%, and from $2,015,800 to $2,240,200, or by 11.1%, for the three and nine
months ended September 30, 1997 as compared to the corresponding periods in
1996. Of the $54,400 increase in revenues for the three months ended September
30, 1997 as compared to the corresponding period in 1996, $48,200 was due to
increases in regulated service rates that were implemented by the Partnership in
the fourth quarter of 1996 and the third quarter of 1997 and $9,100 was due to
an increase in the number of subscriptions, primarily for premium and basic
service. These increases were partially offset by a $2,900 decrease in other
revenue producing items. Of the $224,400 increase in revenues for the nine
months ended September 30, 1997 compared to the corresponding period in 1996,
$160,800 was due to increases in regulated service rates, $46,500 was due to the
restructuring of The Disney Channel from a premium channel to a tier channel
effective July 1, 1996, $13,400 was due to increases in other revenue producing
items and $3,700 was due to an increase in the number of subscriptions,
primarily for basic service. As of September 30, 1997, the Partnership had
approximately 7,000 homes subscribing to cable service and 1,700 premium service
units.
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<PAGE> 8
ENSTAR INCOME PROGRAM II-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
Service costs decreased from $199,300 to $174,200, or by 12.6%, and
increased from $589,600 to $606,900, or by 2.9%, for the three and nine months
ended September 30, 1997 as compared to the corresponding periods in 1996.
Service costs represent costs directly attributable to providing cable services
to customers. The decrease for the quarter was principally due to increased
capitalization of labor and overhead costs related to the rebuild of the
Partnership's Taylorville, Illinois cable system. Programming expense accounted
for the majority of the increase in the first nine months of 1997 as compared to
the corresponding 1996 period. Programming expense increased primarily as a
result of higher rates charged by program suppliers.
General and administrative expenses decreased from $66,700 to $61,000,
or by 8.5%, and from $237,300 to $180,000, or by 24.1%, for the three and nine
months ended September 30, 1997 as compared to the corresponding periods in
1996. The decreases for the three and nine months were primarily due to
decreases in personnel costs and insurance premiums. Personnel costs decreased
due to the transfer of certain employees to the Corporate General Partner's
operations.
Management fees and reimbursed expenses increased from $100,600 to
$116,900, or by 16.2%, and from $280,000 to $347,400, or by 24.1%, for the three
and nine months ended September 30, 1997 as compared to the corresponding
periods in 1996. Management fees increased in direct relation to increased
revenues as described above. Reimbursable expenses increased primarily due to
higher allocated personnel costs resulting from the transfer of personnel to the
Corporate General Partner's staff from the Partnership's operations.
Operating income before income taxes, depreciation and amortization
(EBITDA) is a commonly used financial analysis tool for measuring and comparing
cable television companies in several areas, such as liquidity, operating
performance and leverage. EBITDA as a percentage of revenues increased from
47.6% to 53.3% and from 45.1% to 49.4% during the three and nine months ended
September 30, 1997 compared to the corresponding periods in 1996. The change was
primarily due to higher revenues. EBITDA increased from $333,000 to $401,900, or
by 20.7%, and from $908,900 to $1,105,900, or by 21.7%, during the three and
nine months ended September 30, 1997 compared to the corresponding periods in
1996. EBITDA should be considered in addition to and not as a substitute for net
income and cash flows determined in accordance with generally accepted
accounting principles as an indicator of financial performance and liquidity.
Depreciation and amortization expense increased from $59,500 to
$86,600, or by 45.6%, for the three months and decreased from $241,400 to
$227,300, or by 5.8%, for the nine months ended September 30, 1997 as compared
to the corresponding periods in 1996. The increase for the three months was the
result of placing into service a portion of the Taylorville, Illinois system
rebuild. The nine months' decrease was due to the effect of certain plant assets
becoming fully depreciated in 1996. Depreciation and amortization expense will
continue to increase significantly in future periods as remaining portions of
the system rebuild are placed into service.
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<PAGE> 9
ENSTAR INCOME PROGRAM II-1, L.P.
RESULTS OF OPERATIONS (CONTINUED)
Operating income increased from $273,500 to $315,300, or by 15.3%, and
from $667,500 to $878,600, or by 31.6%, for the three and nine months ended
September 30, 1997 as compared to the corresponding periods in 1996, principally
due to increased revenues as described above.
Interest income increased from $31,000 to $31,500, or by 1.6%, and from
$89,000 to $105,800, or by 18.9%, for the three and nine months ended September
30, 1997 as compared to the corresponding periods in 1996. These increases were
primarily due to a change in investment policy that yielded a greater return on
invested cash. Interest income also increased due to higher cash balances
available for investment.
Due to the factors described above, the Partnership's net income
increased from $306,500 to $342,100, or by 11.6%, and from $757,800 to $986,900,
or by 30.2%, for the three and nine months ended September 30, 1997 as compared
to the corresponding periods in 1996.
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 and capital requirements relating to the expansion,
improvement and upgrade of its cable systems.
At September 30, 1997, the Partnership had no debt outstanding. The
Partnership relies upon cash flow from operations to meet operating requirements
and fund necessary capital expenditures. Although the Partnership currently has
a significant cash balance, there can be no assurance that the Partnership's
cash flow will be adequate to meet its future liquidity requirements. The
Partnership is required to rebuild its Taylorville, Illinois cable system at an
estimated total cost of $2,490,000 as a condition of its franchise agreement and
is also rebuilding portions of its cable systems in surrounding communities at
an estimated additional cost of approximately $789,000. Rebuild construction
began in October 1996 and is expected to be completed in the second half of
1997. The Partnership has budgeted expenditures of $2,460,000 in 1997 to
complete the entire rebuild. Construction costs related to the rebuild
approximated $1,582,400 during the first nine months of 1997. Other capital
expenditures budgeted for 1997 include approximately $400,000 for the
improvement and upgrade of other assets. As a result, the Partnership intends,
if possible, to maintain cash reserves. In the future, the Partnership may also
need to borrow.
The Corporate General Partner had engaged in discussions with a number
of possible financing sources regarding the availability and terms of a bank
facility for the Partnership. These discussions were not successful. The
Corporate General Partner was generally advised that an individual facility of
the size needed by the Partnership is too small to interest most banks which
lend to the cable television industry. Accordingly, on June 6, 1997, the
Corporate General Partner and an affiliated partnership formed Enstar Finance
Company, LLC ("EFC"). On September 30, 1997, EFC obtained a secured bank
facility of $35 million from two agent banks in order to provide funds that
would in turn be advanced to the Partnership and certain of the other related
partnerships managed by the Corporate General Partner. The Partnership's maximum
loan commitment will approximate $799,600, which it becomes eligible to borrow
at such time as the Partnership enters into a loan agreement with EFC. The
partnership agreement requires borrowings from
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<PAGE> 10
ENSTAR INCOME PROGRAM II-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
an affiliate to be repaid within 12 months. Such funds would be used to provide
capital to fund future rebuild and upgrade requirements.
Based on discussions with prospective lenders, the Corporate General
Partner believes that this structure provides capital to the Partnership on
terms more favorable than could be obtained on a "stand-alone" basis, with the
possible exception of the short-term period permitted by the partnership
agreement. Advances by EFC under its partnership loan facilities are
independently collateralized by the individual partnership borrowers so that no
partnership is liable for borrowings made to other partnerships. Borrowings bear
interest at the lender's base rate (8.5% at September 30, 1997), as defined,
plus 0.625%, or at an offshore rate, as defined, plus 1.875%. The Partnership
will be permitted to prepay amounts outstanding under the facility at any time
without penalty, and will be able to reborrow throughout the term of the
facility up to the maximum commitment then available so long as no event of
default exists. The Partnership will also be required to pay a commitment fee of
0.5% per annum on the unused portion of its facility when it becomes eligible to
borrow, and an annual administrative fee.
The facility will contain certain financial tests and other covenants
including, among others, restrictions on incurrence of indebtedness,
investments, sale of assets, acquisitions and other covenants, defaults and
conditions. The facility will also contain restrictions on the payment of
distributions to partners if an event of default exists.
The Partnership paid distributions totaling $94,500 and $283,500 during
the three and nine months ended September 30, 1997, and expects to continue to
pay distributions at this level during the remainder of 1997. There can,
however, be no assurances regarding the level, timing or continuation of future
distributions.
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
Cash provided by operating activities decreased by $36,300 from
$1,190,900 to $1,154,600 for the nine months ended September 30, 1997 as
compared with the corresponding period in 1996. Changes in receivables, prepaid
expenses and other assets used $242,600 more cash in the first nine months of
1997 due to the timing of receivable collections and the payment of prepaid
expenses. The Partnership used $11,400 more cash to pay liabilities owed to the
General Partner and third party creditors during the nine months ended September
30, 1997 than in the comparable period of 1996 due to differences in the timing
of payments. Cash generated by Partnership operations increased by $217,700
after adding back non-cash depreciation and amortization charges.
The Partnership used $1,106,800 more cash in investing activities in
the nine months ended September 30, 1997 than in the corresponding nine months
of 1996, due to a $1,099,000 increase in expenditures for tangible assets,
partially offset by a $3,200 decrease in expenditures for intangible assets. The
Partnership received proceeds of $11,000 in the first half of 1996 related to
the sale of equipment and other assets.
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<PAGE> 11
ENSTAR INCOME PROGRAM II-1, L.P.
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.
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<PAGE> 12
ENSTAR INCOME PROGRAM II-1, L.P.
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.18 - Franchise agreement between Enstar
Communications Corporation and County of
Christian, IL.
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
<PAGE> 13
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 II-1, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: November 12, 1997 By: /s/ Michael K. Menerey
-----------------------------
Michael K. Menerey,
Chief Financial Officer
<PAGE> 14
ENSTAR INCOME PROGRAM II-1, L.P.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------
<S> <C>
10.18 Franchise agreement between Enstar Communications Corporation and
County of Christian, IL.
</TABLE>
E-1
<PAGE> 1
EXHIBIT 10.18
FRANCHISE AGREEMENT
THIS AGREEMENT is between the County of Christian County, Illinois
("County") and Enstar Communications Corporation ("Enstar").
WHEREAS, the County Board has agreed to renew Enstar's franchise
pursuant to the terms reflected in this instrument to which Enstar has agreed.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, it is agreed as follows:
Section 1. Short Title. This Agreement may be referred to and cited as
the "Enstar Franchise Agreement."
Section 2. Definitions. For the purposes of this Agreement the following
terms, phrases, words and their derivations shall have the meaning defined
herein, unless the context clearly indicates that another meaning is intended.
Words used in the present tense include the future, words in the plural number
include the singular number, and words in the singular number include the plural
number.
1
<PAGE> 2
"Application" means seeking an extension of its franchise, its subsequent
renewal proposals, the public hearings held relevant to the proposed renewal,
and all related correspondence.
"Cable Act" means The Cable Communications Policy Act of 1984 as modified by the
Cable Television Consumer Protection and Competition Act of 1992, and the
Telecommunications Act of 1996.
"Cable Television System" means any non-broadcast facility consisting of a set
of transmission paths and associated signal reception, transmission and control
equipment, that is designed to distribute to subscribers or other users audio,
video and other forms of communications services via electronic or electrical
signals.
"Channel" is a band of frequencies in the electromagnetic spectrum, capable of
carrying one audio-visual television signal.
"County" means Christian County in the State of Illinois in its present form or
in any later reorganized, consolidated, enlarged or reincorporated form, which
is legally authorized to grant a cable television franchise under state and
federal law. The "County" may also be referred to as "Franchising Authority" or
"Grantor".
"Enstar" means Enstar Communications Corporation, which may also be referred to
as "Grantee".
2
<PAGE> 3
"FCC" means the Federal Communications Commission.
"Franchise" means the rights granted pursuant to this Agreement to construct,
own and operate a cable television system along the public ways in the County,
or within specified areas in the County.
"Franchise Area" means that portion of the County for which a franchise is
granted under the authority of this Agreement. If not otherwise stated in an
exhibit to this Agreement, the Franchise Area shall be the legal and geographic
limits of the County, including all territory which may be hereafter annexed to
the County
"Franchising Authority" means Christian County, Illinois, its County Board
acting as the County's duly elected governing body, its lawful successor or such
other person or body duly authorized to grant a cable television franchise.
"Grantee" means a person or business entity, or its lawful successor or
Assignee, which has been granted a franchise by the County Board pursuant to
this Agreement.
"Gross Subscriber Receipts" as the term is used in calculating franchise fees
means revenues actually received by the Grantee from television services it
provides to its subscribers in the Franchise Area after deducting the following:
a) any fees or assessments levied on subscribers
3
<PAGE> 4
or users of the system which are collected by the Grantee for payment to a
governmental entity; b) franchise fees paid by the Grantee to the County; c)
state or local sales or property taxes imposed on the Grantee and paid to a
governmental entity; and d) federal copyright fees paid by the Grantee to the
Copyright Tribunal in Washington, DC.
"Normal Business Hours" means those hours during which most similar businesses
in the community are open to serve customers. In all cases, "normal business
hours" must indicate some evening hours at least one night per week and/or some
weekend hours.
"Normal Operating Conditions" means those service conditions which are within
the control of the Grantee. Those conditions which are not within the control of
the Grantee include, but are not limited to, natural disasters, civil
disturbances, power outages, telephone network outages, and severe or unusual
weather conditions. Those conditions which are ordinarily within the control of
the Grantee include, but are not limited to, special promotions, pay-per-view
events rate increases, regular peak or seasonal demand periods, and maintenance
or upgrade of the cable system.
"Public Way" or "Right-of-Way" means the surface, the air space above the
surface and the area below the surface of any public street, highway, lane,
path, alley, sidewalk, boulevard, drive, bridge, tunnel, park, parkways,
waterways, or other public right-of-way including public
4
<PAGE> 5
utility easements or rights-of-way and any temporary or permanent fixtures or
improvements located thereon now or hereafter held by the County which shall
entitle the County and the Grantee to the use thereof for the purpose of
installing and maintaining the Grantee's cable television system.
"School" means any public elementary or secondary school.
"Service Interruption" means the loss of picture or sound on one or more cable
channels.
"Subscriber" means any person who receives monthly cable television service
provided by the Grantee's cable television system.
Section 3. Grant of Authority.
(a) There is hereby granted by the County to the Grantee the right and
privilege to construct, operate, maintain and extend a cable system to all
places within the County. The rights granted hereunder shall be non-exclusive
and shall not be transferred or assigned without the prior approval of the
County as specified in Section 14 of this Agreement, which approval shall not be
unreasonably withheld.
(b) The Grantee shall have the right to use and occupy roads, streets,
alleys, public ways and easements for the purposes of installing its wires,
cables, and associated equipment in or on poles, by direct burial, or in
underground conduits as necessary for the operation of the cable system. This
authority, however, does not obviate the need for
5
<PAGE> 6
obtaining permits from the County for construction involving the disturbance of
public streets, sidewalks or thoroughfares and for compliance with all County
regulations and requirements relative to construction and operation of
facilities in the public rights-of-way.
Section 4. Compliance with Applicable Laws and Ordinances. The
Franchisee shall, at all times during the life of this Agreement, be subject to
all lawful exercise of the police power by the County consistent with the
Franchisee's contractual rights, and shall be required to comply fully with all
federal and state statutes and regulations governing cable communications.
Section 5. Provision of Service.
(a) 1. A Grantee which is not already serving the entire franchise area
shall provide service to all portions of the franchise area reaching a minimum
density of thirty (30) dwelling units per linear strand mile, as measured from
the nearest coaxial cable line, within twelve (12) months after the grant of a
franchise.
2. Grantee shall provide aerial or buried drop lines to new subdivisions
within the franchise area at the request of the developer provided that the
developer contracts and agrees with the Grantee to pay the cost of the extension
of the service.
3. Grantee shall extend and make cable television service available to
any resident within the franchise area who requests connection at the standard
connection charge if the connection to the
6
<PAGE> 7
resident would require no more than a standard one hundred and fifty (150) foot
aerial drop or a seventy-five (75) foot buried drop line or extension from the
nearest coaxial feeder cable. With respect to requests for connection requiring
an aerial or buried drop line in excess of the maximum standard distance,
Grantee shall extend and make available cable television service to such
residents at a connection charge not to exceed its actual costs for the distance
exceeding the standard one hundred and fifty (150) feet of aerial or
seventy-five (75) feet of underground cable respectively.
4. In areas with fewer than thirty (30) residential units per proposed
cable bearing strand mile, Grantee shall offer a cost-sharing arrangement with
residents. A dwelling unit will be counted for this purpose if its lot fronts a
street. The cost-sharing arrangement shall consist of the following:
5. At the request of a resident desiring service, Grantee shall
determine the cost of the plant extension required to provide service to the
potential subscriber from the closest point on the cable system where it is
technically feasible. The cost of construction shall be allocated based on the
following formula:
6. If a request for extension of service into a residential area
requires the construction of cable plant which does not pass at least thirty
(30) potential subscribers per proposed cable bearing strand mile,
7
<PAGE> 8
Grantee and residents who agree to subscribe to cable service will each bear
their proportionate share of construction costs. For example, if there are five
(5) dwelling units per proposed cable bearing strand mile, Grantee's share will
equal 5/30ths or one sixth (1/6) of the construction cost. The remaining cost
will be shared equally by each subscriber.
7. Should additional residents actually subscribe to cable television
service in areas where subscribers have already paid a proportionate share under
the extension cost sharing formula, subscribers who have previously paid a
proportionate share under the extension formula shall be reimbursed pro rata for
their contribution or a proportional share thereof. In such case, the pro rata
shares shall be recalculated and each new subscriber shall pay the new pro rata
share, and all subscribers who previously paid a proportionate share shall
receive pro rata refunds. In the event such subscribers (or prior subscribers)
have been disconnected or have moved and owe the Grantee money which has not
been recovered, Grantee shall have the right to first apply the refund to
amounts owed the Grantee and give the balance, if any to the subscriber. At such
time as there are thirty (30) potential subscribers per cable bearing strand
mile, the subscribers shall receive their pro rata share of construction costs.
In any event, one (1) year after the completion of a project, subscribers who
have paid a share of line extension costs are no longer eligible for refunds,
and the amounts paid in construction costs will be credited to the plant account
of Grantee.
8
<PAGE> 9
8. Where the density of residential dwelling and occupied commercial or
industrial structures, adverse terrain, or other factors render extension of the
system and offering of cable service impractical, technically infeasible or
would create an economic hardship, the County may, upon petition of the Grantee,
either waive the extension of the system into such areas, or allow the extension
and offer of service on special terms or conditions which are reasonable and
fair to the County, the Grantee and potential subscribers in such areas.
(b) The Franchisee shall extend service to each school passed by the
cable system. No charge shall be made for installation or for basic service,
except the Franchisee may: 1.) charge for its cost of installation if more than
one connection is desired at each building; or 2.) charge for that portion of
the cost of installation which exceeds One Hundred Dollars ($100.00). If during
the term of this Agreement, new schools are constructed within the County, the
County may also require the extension of service to such schools under the same
terms and conditions as for existing public buildings.
(c) The initial subscriber rates are to be as specified in Exhibit "A"
hereto. Subscriber rates may be later modified as allowed by federal law or
regulation.
(d) Regular basic service shall consist of a minimum of 12 channels. The
Franchisee shall create and provide such other categories of service as it may
deem necessary, except that the total number of channels available in all
categories of service shall not be less than 35
9
<PAGE> 10
channels. The programming carried shall be determined by the Franchisee;
provided, however, the County may suggest changes from time-to-time that it
believes will better satisfy public needs in terms of broad categories of
programming.
(e) The Grantee shall provide written information of each of the
following areas at the time of installation of service, at least annually to all
subscribers, and at any time upon request:
products and services offered; prices and options for programming
services and conditions of subscription to programming and other services;
installation and services maintenance policies; instructions on how to use the
cable service; channel positions of programming carried on the system; and
billing and complaint procedures, including the address and telephone number of
the local franchise authority's cable office.
Section 6. Liability and Indemnification.
(a) By its acceptance of this Agreement, the Grantee specifically agrees
that it will indemnify and hold the County, including all its officials,
employees and agents, harmless against any and all claims arising out of the
grant of this franchise and the operation of Grantee's cable system. The Grantee
shall pay all expenses incurred by the County in defending itself against all
such claims, including all out-of-pocket expenses such as the reasonable value
of any service rendered by the County Attorney or any employees of the County.
(b) The Grantee shall maintain throughout the terms of this Agreement
comprehensive liability insurance insuring the County, including its officials,
employees and agents, and the Grantee with
10
<PAGE> 11
regard to all damages with respect to operations performed by, or on behalf of,
the Grantee in the minimum amounts as specified below:
1. A general comprehensive liability policy indemnifying, defending and
saving harmless the County, its officers, boards, commissions, agents or
employees from any and all claims by any person whatsoever on account of injury
to or death of a person or persons occasioned by the operations of the Grantee
under the franchise herein granted, or alleged to have been so caused or
occurred, with a minimum liability of Five Hundred thousand Dollars ($500,000)
per personal injury, death of any one person or damage to property and One
Million Dollars ($1,000,000) for personal injury, death of any two or more
persons in any one occurrence or damage to property.
2. All insurance policies called for herein shall be in a form
satisfactory to the County and shall require thirty (30) days written notice of
any cancellation to both the County and the Grantee. The Grantee shall, in the
event of any such cancellation notice, obtain, pay all premiums for, and file
with the County, written evidence of the issuance of replacement policies within
thirty (30) days following receipt by the County or the Grantee of any notice of
cancellation. In recognition of the foregoing each party agrees to cause their
respective insurance carriers to waive any rights of subrogation.
(c) The Grantee shall, on or before the effective date of this
Agreement, establish a performance bond in the amount of ten thousand
11
<PAGE> 12
dollars ($10,000), which shall be used for insuring that the Grantee will
fulfill and perform each term and condition of this Agreement.
(d) Because the County will suffer damages from any violation of this
Agreement, which damages may be difficult to quantify, the County and the
Franchisee agree to the following schedule of liquidated damages:
(1) Failure to file reports or supply information as required - $50 per
day
(2) Failure to perform annual sweep and balance tests - $100 per day
(3) Failure to perform maintenance and retain maintenance records as
required - $100 per day.
(4) Failure to maintain insurance or replenish security fund/
performance as required - $100 per day.
(5) Failure to achieve or maintain technical performance standards -
$100 per day.
(6) Failure to maintain customer service standards - $50
per day.
(7) Other material violations - $100 per day violations per day
that each violation continues.
Before assessing the Franchisee for liquidated damages, the County shall give
written notification to the Franchisee in advance so that the Franchisee will
have notice of the violation and an opportunity to correct it. The liquidated
damages shall not commence accruing for uncorrected violation until the 30th day
following the date the notice was received by the Franchisee. In the event the
Grantee is prevented or delayed in the performance of any of its obligations
under this Agreement
12
<PAGE> 13
by reason of flood, fires, hurricanes, tornadoes, earthquakes or other acts of
God, unavoidable casualty, insurrections, war, riot, sabotage, unavailability of
materials or supplies, vandalism, strikes, boycotts, lockouts, labor disputes,
shortage of labor, unusually severe weather conditions, acts or omissions or
delays by utility companies upon whom Grantee is dependent for pole attachments
or easement use, Grantee is unable to obtain necessary financing or any other
event which is beyond the reasonable control of the Grantee, the Grantee shall
have a reasonable time under the circumstances to perform its obligations under
this Agreement or to procure a reasonable and comparable substitute for such
obligations. Under such circumstances the Grantee shall not be held in default
or noncompliance with the provisions of the Agreement nor shall it suffer any
penalty or relating thereto.
(e) All insurance and bond instruments must be approved as to form by
the County Attorney prior to their effectiveness.
Section 7. Technical Requirements. The Grantee shall maintain and extend
its system so as to provide high quality signals and reliable service. The
system shall meet or exceed any applicable technical performance standards of
the FCC.
Section 8. Emergency Use of Facilities. In the case of any emergency or
disaster, the Grantee shall, upon request of the County, make available its
facilities to the County for emergency use during the emergency or disaster
period.
Section 9. Other Business Licenses. This Agreement authorizes only the
operation of a cable system as provided for herein, and does not take
13
<PAGE> 14
the place of any other franchise, license, or permit which might be required of
the Grantee by law.
Section 10. Duration and Acceptance of Agreement. This Agreement and the
rights, privileges, and authority hereby granted shall take effect and be in
force from the effective date of this Agreement and shall continue in force
throughout its term provided that within sixty (60) days after the date of
adoption of this Agreement by the County Board the Grantee shall provide
evidence of satisfactory compliance with the performance bond and insurance
requirements hereof. Failure of the Grantee to do so within said time period
shall operate to make this Agreement null and void without further action by the
County.
Section 11. Franchise Fee.
(a) The Grantee shall pay a franchise fee to compensate the County for
all costs associated with administering and regulating the cable system. The
amount of the franchise fee shall be 5% of the Grantee's annual Gross Subscriber
Receipts, as defined herein. Such fee shall be paid on an annual basis. Grantee
shall be entitled to list the franchise fee as a separate line item on monthly
bills.
(b) Due to federal and local requirements to notify cable subscribers of
any increases in monthly rates or charges, increased franchise fee amounts due
to the County shall begin accruing sixty (60) days after the effective date of
this franchise.
(c) At the County's request, the Grantee shall file a report showing
Grantee's Gross Subscriber Receipts for the calendar year and the amount of
franchise fees due to the County. Such reports may be
14
<PAGE> 15
requested once per calendar year. The Grantee shall have an obligation to
maintain financial records of its Gross Subscriber Receipts and Grantee fee
payments for audit purposes for a period of three years, and the County shall
have the right to audit the Grantee's books at the offices where such books are
maintained.
Section 12. Customer Service.
(a) Cable System Office Hours and Telephone Availability
The Grantee will maintain a local, toll-free or collect call telephone access
line which will be available to its subscribers 24 hours per day, seven days per
week. Trained company representatives will be available to respond to customer
telephone inquiries during normal business hours. After normal business hours,
the access line may be answered by a service or an automated response system,
including an answering machine. Inquiries received after normal business hours
must be responded to by a trained company representative on the next business
day. Customer service center and bill payment locations will be open at least
during normal business hours and will be conveniently located.
(b) Installation, Outages and Service Calls
1. Standard installations will be performed within seven (7) business
days after an order has been placed. "Standard" installations are those that are
located up to 125 feet from the existing distribution system.
2. Excluding conditions beyond the control of the Grantee, the Grantee
will begin working on "service interruptions" promptly and in no
15
<PAGE> 16
event later than 24 hours after the interruption becomes known. The Grantee must
begin actions to correct other service problems the next business day after
notification of the service problem.
3. The "appointment window" alternatives for installations, service
calls, and other installation activities will be either a specific time or a
four-hour time block during normal business hours. The Grantee may schedule
service calls and other installation activities outside of normal business hours
for the express convenience of the customer.
4. A Grantee may not cancel an appointment with a customer after the
close of business on the business day prior to the scheduled appointment.
5. If Grantee's representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer
will be contacted. The appointment will be rescheduled, as necessary, at a time
which is convenient for the customer.
Section 13. System Maintenance.
(a) The Franchisee shall maintain the system at the highest commercially
practical level of technical quality. To that end, it shall perform, at a
minimum, all tests required to be performed by a Cable Operator pursuant to FCC
regulations.
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<PAGE> 17
(b) The Franchisee shall retain a copy of all maintenance logs and
records for a period of two years. Upon request of the County, the Franchisee
shall provide copies of such documentation to the County.
(c) No less than once a year the Franchisee shall perform a sweep and
balance of the system activities to ensure that the entire system is performing
as required.
Section 14. TRANSFER OR ASSIGNMENT OF FRANCHISE
(a) A Grantee may transfer or assign its franchise to another entity
(the "Assignee") upon thirty (30) days notice to the County. The Grantee shall
provide to the County a reasonable showing that the proposed Assignee or
Transferee possesses the technical and financial qualifications to operate the
cable TV system properly. The proposed Transferee or Assignee shall provide the
County with a written statement that it agrees to comply with all material terms
of the franchise to be transferred. The County shall not unreasonably delay or
deny the assignment or transfer of a franchise. The reasonableness of the
County's actions shall be subject to judicial review by a court of appropriate
jurisdiction. The proposed transfer or assignment shall be deemed approved if no
action is taken by the County within sixty (60) days of the written request for
transfer by the Grantee.
(b) The Grantee may secure financing or an indebtedness by trust,
mortgage, or other instrument of hypothecation of the franchise, in whole or in
part, without requiring the consent of the City. Consent shall not be required
to assign a franchise from one business entity to another which is operated or
managed by the Grantee or any affiliated entity. In
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<PAGE> 18
addition, so long as the manager and/or general partner of the Grantee remains
the same, consent shall not be required to transfer the interests of any limited
partner of the Grantee, who has no day to day operational control of the Grantee
or the system.
(c) A Grantee may transfer or assign its franchise to an affiliated
entity upon thirty (30) days notice to the City. Consent of the County shall not
be required for such an assignment, provided that; a) the County is provided
with a reasonable showing that the proposed Assignee possesses the technical and
financial qualifications to operate the cable TV system and , b) that the
Assignee agrees to comply with the terms of this Agreement.
Section 15. NOTICE TO GRANTEE
Except as otherwise provided in this Agreement, the County shall not meet to
take any action involving the Grantee's franchise unless the County has notified
the Grantee by certified mail at least thirty (30) days prior to such meeting,
as to its time, place and purpose. The notice provided for in this section shall
be in addition to, and not in lieu of, any other notice to the Grantee provided
for in this Agreement. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if mailed by certified mail return receipt requested, addressed
to the Grantee's corporate office as follows:
Enstar Cable TV
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<PAGE> 19
10900 Wilshire Boulevard, 15th Floor
Los Angeles, California 90024
Attn: Howard Gan
And to:
Enstar Cable TV
11 Clearing Avenue
Taylorville, IL 62568
Attn: Regional Manager
Section 16. Miscellaneous Provisions.
(a) Whenever this Agreement shall set forth any time for an act to be
performed by or on behalf of the Franchisee, such time shall be deemed of the
essence.
(b) This Agreement may not be amended except by written instrument
executed by both parties hereto.
(c) This Agreement shall be interpreted under the laws of the State of
Illinois.
(d) If any provisions of this Agreement is found by any court,
government agency or other body having jurisdiction to be invalid, illegal or
unenforceable, the parties shall negotiate appropriate changes to such
provision, and the remaining provisions, to the extent practical, shall remain
in full force and effect.
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<PAGE> 20
Section 17. Term of Agreement. This Agreement shall take effect as of
the date of its adoption, provided that one executed copy is delivered by Enstar
to the County Clerk within sixty (60) days of the adoption date. If not so
executed and delivered as stated, this Agreement shall be null and void. Once
effective, this Agreement shall remain in effect for a period of fifteen (15)
years, unless extended or renewed as provided for in Section 18 hereof.
Provided, however, if the requirements of Sections 6(b) and (c) and 10 of this
Agreement are not satisfied within sixty (60) days of the effective date, this
Agreement shall become null and void.
Section 18. Renewal. This Franchise Agreement shall be renewed pursuant
to the renewal requirements contained in Section 626 of the Cable Act.
Section 19. Effective Date. This Franchise Agreement shall become
effective upon the date of its adoption by the County. Any failure by the County
to follow proper procedures under state or local law in adopting this Agreement
shall not abrogate the rights or obligations of either the Grantee or the County
under this Agreement. If, following adoption of this Agreement it is
subsequently determined that proper legal procedures have not been followed by
the County, it shall be the responsibility of the County to rectify any
procedural defects and ratify the terms of this Franchise Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as
follows:
20
<PAGE> 21
COUNTY OF CHRISTIAN COUNTY, ILLINOIS Attest:
By: /s/ Wm C. Cuntin /s/ Perry E. Ryan
------------------------- ----------------------------
County Chairman County Clerk
Date: 12 June 1997
-------------------------
ENSTAR COMMUNICATIONS CORPORATION Attest:
By: /s/ Howard Gan /s/ Susan Spanknoble
------------------------- ----------------------------
Assistant to Howard Gan, VP
Its V.P.
------------------
Date: 10 July 1997
------------------
A fully executed copy of this Agreement was deposited and filed with the
County of Christian County, Illinois, on the 12th day of June, 1997.
/s/ Perry E. Ryan
----------------------------
County Clerk
21
<PAGE> 22
<TABLE>
<CAPTION>
(Effective: 10/1/96)
ENSTAR CABLE TV - Christian Co. (Taylorville),. IL Exhibit A
CHANNEL LINE-UP-------------------- RATES---------------------------
<S> <C> <C> <C>
2 QVC BASIC $23.69
3 WCIA 3-CBS CHAMPAIGN, IL TIER (=) 3.33
4 WAND 17-ABC DECATUR, IL SATELLITE PACKAGE 1 (+) 7.05
5 KSDK 5-NBC ST. LOUIS, MO BASIC ON ADDITIONAL OUTLET 0.00
6 ESPN
7 THE MOVIE CHANNEL INSTALLATION/SERVICE (per hr.) 45.00
8 WFHL 23-IND DECATUR, IL INSTALL MATERIALS (if any) At Cost
9 WILL-TV 12-PBS URBANA-CHAMPAIGN, IL REMOTE 0.23
10 WICK 20-NBC SPRINGFIELD,IL NON-ADDRESSABLE CONVERTER 1.17
11 KPLR-TV 11-IND ST. LOUIS, MO RADIO SERVICE 1.95
12 LOCAL-CHARACTER GENERATED
13 WRSP-TV 55-FOX SPRINGFIELD, IL WIRE MAINTENANCE AGREEMENT 1.50
14 LIFETIME CABLE PROGRAM GUIDE 1.75
15 CINEMAX LATE PAYMENT FEE 1.50
16 USA NETWORK RETURNED CHECK FEE 25.00
17 WGN-TV LOST/STOLEN CONVERTER EQUIP Prices Vary
18 ARTS & ENTERTAINMENT DAMAGED CONVERTER EQUIPMENT Actual Cost
19 MTV to Repair
21 HBO
22 COUNTRY MUSIC TV PREMIUM SERVICES (*)-----------------------
23 THE DISNEY CHANNEL CINEMAX 11.95
24 WTBS 17-IND ATLANTA, GA HBO 11.95
25 THE FAMILY CHANNEL THE MOVIE CHANNEL 11.95
26 TNT
27 THE DISCOVERY CHANNEL SHOWTIME 11.95
28 SHOWTIME -------------------------------------------
29 CNN HEADLINE NEWS All Broadcast TV stations carried on a channel
30 THE NASHVILLE NETWORK higher than 13 can only be received via cable
31 CNN through a converter box, unless you have a
32 THE WEATHER CHANNEL cable ready TV set. Converter boxes are available
33 AMERICAN MOVIE CLASSICS for rent at the low rate listed above.
34 NICKELODEON
35 CNBC The above rates may not include applicable
36 LOCAL WEATHER taxes fees and assessments. Any such amounts will be
98 SCI-FI CHANNEL itemized on your bill.
99 C-SPAN
</TABLE>
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT SEPTEMBER 30, 1997, AND THE STATEMENTS OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,104,400
<SECURITIES> 0
<RECEIVABLES> 51,600
<ALLOWANCES> 9,800
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 7,617,200
<DEPRECIATION> 4,334,100
<TOTAL-ASSETS> 5,838,600
<CURRENT-LIABILITIES> 620,500
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,838,600
<SALES> 0
<TOTAL-REVENUES> 2,240,200
<CGS> 0
<TOTAL-COSTS> 1,361,600
<OTHER-EXPENSES> (119,000)
<LOSS-PROVISION> 23,300
<INTEREST-EXPENSE> 10,700
<INCOME-PRETAX> 986,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 986,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 986,900
<EPS-PRIMARY> 32.64
<EPS-DILUTED> 0
</TABLE>
