<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 March 31, 1996
--------------------------------
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 0-15705
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Enstar Income Program IV-1, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Georgia 58-1648322
- ----------------------------------------------------------------------------------------------------
<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.)
</TABLE>
10900 Wilshire Boulevard, 15th Floor, Los Angeles, CA 90024
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(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 X 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
--- ---
<PAGE> 2
PART I - FINANCIAL INFORMATION
ENSTAR INCOME PROGRAM IV-1, L.P.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1995* 1996
----- ----
ASSETS: (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 3,200 $ 470,300
Equity in net assets of Joint Ventures:
Enstar IV/PBD Systems Venture 1,772,100 1,451,000
Enstar Cable of Macoupin County 828,100 647,000
----------- -----------
2,600,200 2,098,000
Due from affiliates 35,700 --
Deferred loan costs, net 50,800 46,700
----------- -----------
$ 2,689,900 $ 2,615,000
=========== ===========
<CAPTION>
LIABILITIES AND PARTNERSHIP CAPITAL
<S> <C> <C>
LIABILITIES:
Note payable $ 1,008,900 $ 1,008,900
Accounts payable 15,500 19,100
Due to affiliates -- 6,000
----------- -----------
TOTAL LIABILITIES 1,024,400 1,034,000
----------- -----------
PARTNERSHIP CAPITAL (DEFICIT):
General partners (66,700) (67,600)
Limited partners 1,732,200 1,648,600
----------- -----------
TOTAL PARTNERSHIP CAPITAL 1,665,500 1,581,000
----------- -----------
$ 2,689,900 $ 2,615,000
=========== ===========
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
-2-
<PAGE> 3
ENSTAR INCOME PROGRAM IV-1, L.P.
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Unaudited
------------------------
Three months ended
March 31,
------------------------
1995 1996
---- ----
<S> <C> <C>
OPERATING EXPENSES:
General and administrative expenses $ (4,500) $ (7,900)
-------- --------
(4,500) (7,900)
-------- --------
OTHER INCOME (EXPENSE):
Interest income 3,000 1,800
Interest expense (31,600) (30,000)
-------- --------
(28,600) (28,200)
-------- --------
LOSS BEFORE EQUITY IN NET INCOME
OF JOINT VENTURES (33,100) (36,100)
-------- --------
EQUITY IN NET INCOME
OF JOINT VENTURES:
Enstar IV/PBD Systems Venture 35,000 58,900
Enstar Cable of Macoupin County 9,700 18,800
-------- --------
44,700 77,700
-------- --------
NET INCOME $ 11,600 $ 41,600
======== ========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ .29 $ 1.03
======== ========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 39,982 39,982
======== ========
</TABLE>
See accompanying notes to condensed financial statements.
-3-
<PAGE> 4
ENSTAR INCOME PROGRAM IV-1, L.P.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Unaudited
----------------------
Three months ended
March 31,
----------------------
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,600 $ 41,600
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Equity in net income of Joint Ventures (44,700) (77,700)
Amortization of deferred loan costs 4,000 4,100
Increase (decrease) from changes in:
Due from affiliates -- 35,700
Accounts payable and due to affiliates (4,200) 9,600
--------- ---------
Net cash provided by (used in) operating activities (33,300) 13,300
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from Joint Ventures -- 580,000
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (126,200) (126,200)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (159,500) 467,100
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 354,100 3,200
--------- ---------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 194,600 $ 470,300
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
-4-
<PAGE> 5
ENSTAR INCOME PROGRAM IV-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
months ended March 31, 1996 and 1995 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 months ended March 31, 1996 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 (the
"Agreement") with a wholly-owned subsidiary of the Corporate General Partner
(the "Manager") pursuant to which it pays a monthly management fee of 5% of
gross revenues. The Agreement also provides that the Partnership will reimburse
the Manager for (i) direct expenses incurred on behalf of the Partnership and
(ii) for the Partnership's allocable share of the Manager's operational costs.
No such costs and expenses were incurred or charged to the Partnership for these
services during the three months ended March 31, 1996. The Manager has entered
into identical agreements with Enstar IV/PBD Systems Venture and Enstar Cable of
Macoupin County (both Georgia general partnerships, of which the Partnership is
a co-general partner - herein referred to as the "Joint Ventures"), except that
Enstar Cable of Macoupin County (the "Macoupin Joint Venture") pays the Manager
only a 4% management fee. However, the Macoupin Joint Venture is required to
distribute to Enstar Communications Corporation (which is the Corporate General
Partner of the Macoupin County Joint Venture as well as of the Partnership) an
amount equal to 1% of the Joint Venture's gross revenues in respect of Enstar
Communications Corporation's interest as the Corporate General Partner of the
Joint Venture. No management fee is payable by the Partnership in respect of any
amounts received by the Partnership from the Joint Ventures, and there is no
duplication of reimbursed expenses or costs of the Manager. The Joint Ventures
paid the Manager management fees of approximately $80,600 and reimbursement of
expenses of approximately $106,300 under the management agreements for the three
months ended March 31, 1996. In addition, the Macoupin Joint Venture paid the
Corporate General Partner approximately $4,300 in respect of its 1% special
interest during the three months ended March 31, 1996. Management fees and
reimbursed expenses due the Corporate General Partner are non-interest bearing.
The Joint Ventures also receive certain systems operating management
services from an affiliate of the Corporate General Partner in addition to the
Manager, due to the fact that there are no such employees directly employed by
one of the Joint Ventures' cable systems. The Joint Ventures reimburse the
affiliate for their allocable share of the affiliates' operational costs. The
total amount charged to the Joint Ventures for these costs approximated $25,200
in the three months ended March 31, 1996. No management fee is payable to the
affiliate by the Joint Venture 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 Joint Ventures. In turn, the affiliate charges the Joint Ventures for
these costs based on an estimate of what the Joint Ventures could negotiate for
such programming services on a stand-alone basis. The Joint Ventures paid the
affiliate $402,500 for these programming services for the three months ended
March 31, 1996. Programming fees are included in service costs in the statements
of operations for the three months ended March 31, 1996 and 1995.
-5-
<PAGE> 6
ENSTAR INCOME PROGRAM IV-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(continued)
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 are allocated 99% to the limited partners and
1% to the general partners.
4. RECLASSIFICATIONS
Certain 1995 amounts have been reclassified to conform to the 1996
presentation.
5. EQUITY IN NET ASSETS OF JOINT VENTURES
ENSTAR IV/PBD SYSTEMS VENTURE
Each of the Partnership and an affiliated partnership (Enstar Income
Program IV-2, L.P.) owns 50% of Enstar IV/PBD Systems Venture (the "PBD Joint
Venture"). Each partnership shares equally in the profits and losses of the PBD
Joint Venture. The investment in the PBD Joint Venture is accounted for on the
equity method. Summarized financial information for the PBD Joint Venture as of
March 31, 1996, and the results of its operations for the three months ended
March 31, 1996 and 1995, have been included. The results of operations for the
three months ended March 31, 1996 are not necessarily indicative of results for
the entire year.
<TABLE>
<CAPTION>
December 31, March 31,
1995* 1996
---- ----
(unaudited)
<S> <C> <C>
Current assets $1,525,900 $1,333,100
Investment in cable television
properties, net 2,587,100 2,227,500
Other assets 75,300 71,900
---------- ----------
$4,188,300 $3,632,500
========== ==========
Current liabilities $ 644,300 $ 730,500
Venturers' capital 3,544,000 2,902,000
---------- ----------
$4,188,300 $3,632,500
========== ==========
</TABLE>
*As presented in the audited financial statements.
-6-
<PAGE> 7
ENSTAR INCOME PROGRAM IV-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(continued)
ENSTAR IV/PBD SYSTEMS VENTURE (concluded)
<TABLE>
<CAPTION>
Unaudited
--------------------------
Three months ended
March 31,
--------------------------
1995 1996
---- ----
<S> <C> <C>
REVENUES $ 1,236,600 $ 1,271,700
----------- -----------
OPERATING EXPENSES:
Service costs 432,500 467,200
General and administrative expenses 133,800 199,200
General Partner management fees and reimbursed expenses 150,000 136,900
Depreciation and amortization 457,600 359,100
----------- -----------
1,173,900 1,162,400
----------- -----------
OPERATING INCOME 62,700 109,300
OTHER INCOME (EXPENSE):
Interest income 9,600 11,600
Interest expense (2,200) (3,000)
----------- -----------
NET INCOME $ 70,100 $ 117,900
=========== ===========
</TABLE>
-7-
<PAGE> 8
ENSTAR INCOME PROGRAM IV-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(continued)
ENSTAR CABLE OF MACOUPIN COUNTY
Each of the Partnership and two affiliated partnerships (Enstar Income
Program IV-2, L.P. and Enstar Income Program IV-3, L.P.) owns one third (1/3) of
Enstar Cable of Macoupin County (the "Macoupin Joint Venture"). Each of the
co-partners shares equally in the profits and losses of the Macoupin Joint
Venture. The investment in the Macoupin Joint Venture is accounted for on the
equity method. Summarized financial information for the Macoupin Joint Venture
as of March 31, 1996 and December 31, 1995 and the results of its operations for
the three months ended March 31, 1996 and 1995 have been included. The results
of operations for the three months ended March 31, 1996 are not necessarily
indicative of results for the entire year.
<TABLE>
<CAPTION>
December 31, March 31,
1995* 1996
---- ----
(unaudited)
<S> <C> <C>
Current assets $1,110,000 $ 755,500
Investment in cable television
properties, net 1,722,800 1,598,300
Other assets 7,300 7,200
---------- ----------
$2,840,100 $2,361,000
========== ==========
Current liabilities $ 355,500 $ 420,100
Venturers' capital 2,484,600 1,940,900
---------- ----------
$2,840,100 $2,361,000
========== ==========
</TABLE>
*As presented in the audited financial statements.
-8-
<PAGE> 9
ENSTAR INCOME PROGRAM IV-1, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(concluded)
ENSTAR CABLE OF MACOUPIN COUNTY
<TABLE>
<CAPTION>
Unaudited
----------------------
Three months ended
March 31,
----------------------
1995 1996
---- ----
<S> <C> <C>
REVENUES $ 399,100 $ 425,200
--------- ---------
OPERATING EXPENSES:
Service costs 125,900 129,600
General and administrative expenses 32,600 41,300
General Partner management fees and reimbursed expenses 55,300 54,300
Depreciation and amortization 162,300 151,800
--------- ---------
376,100 377,000
--------- ---------
OPERATING INCOME 23,000 48,200
OTHER INCOME (EXPENSE):
Interest income 6,900 9,400
Interest expense (900) (1,100)
--------- ---------
NET INCOME $ 29,000 $ 56,500
========= =========
</TABLE>
-9-
<PAGE> 10
ENSTAR INCOME PROGRAM IV-1, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
On February 8, 1996, President Clinton signed into law the
Telecommunications Act of 1996 (the "1996 Telecom Act"). This statute
substantially changed the competitive and regulatory environment for
telecommunications providers by significantly amending the Communications Act of
1934, including certain of the rate regulation provisions previously imposed by
the Cable Television Consumer Protection and Competition Act of 1992 (the "1992
Cable Act"). Compliance with those rate regulations has had a negative impact on
the Partnership's revenues and cash flow. However, the Partnership believes that
recent policy decisions by the Federal Communications Commission (the "FCC")
will permit it to increase regulated service rates in the future in response to
specified historical and anticipated future cost increases, although certain
costs may continue to rise at a rate in excess of that which the Partnership
will be permitted to pass on to its customers. The 1996 Telecom Act provides
that certain of the rate regulations will be phased-out altogether in 1999.
Further, 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 completion of a significant
number of FCC rulemakings under the 1996 Telecom Act. There can be no assurance
as to what, if any, future 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 historic interim financial results as
described below are not necessarily indicative of future performance.
In addition to the information set forth in this report, reference is
made to the Partnership's Annual Report on Form 10-K for the year ended December
31, 1995 for additional information regarding regulatory matters and the effect
thereof on the Partnership's business.
All of the Partnership's cable television business operations are
conducted through its participation as a general partner in both Enstar IV/PBD
Systems Venture and Enstar Cable of Macoupin County (collectively, the "Joint
Ventures"). The Partnership has a 50% interest in Enstar IV/PBD Systems Venture
(the "PBD Joint Venture") and a one-third (1/3) interest in Enstar Cable of
Macoupin County (the "Macoupin Joint Venture"). The PBD Joint Venture is owned
equally by the Partnership and an affiliated partnership (Enstar Income Program
IV-2, L.P). The Macoupin Joint Venture is owned equally by the Partnership and
two affiliated Partnerships (Enstar Income Program IV-2, L.P. and Enstar Income
Program IV-3, L.P.) The Partnership participates in the Joint Ventures equally
with its co-partners, based on its proportionate interest, with respect to
capital contributions, obligations and commitments, and results of operations.
Accordingly, in considering the financial condition and results of operations of
the Partnership, consideration must also be made of those matters as they relate
to the Joint Ventures. The following discussion reflects such consideration, and
with respect to Results of Operations, a separate discussion is provided for
each entity.
-10-
<PAGE> 11
ENSTAR INCOME PROGRAM IV-1, L.P.
RESULTS OF OPERATIONS
THE PARTNERSHIP
As discussed above, all of the Partnership's cable television business
operations are conducted through its participation as a partner in the Joint
Ventures. The Joint Ventures made distributions totaling $580,000 to the
Partnership during the three months ended March 31, 1996. The Partnership
distributed $126,200 to its partners during the three months ended March 31,
1996.
THE PBD JOINT VENTURE
The Joint Venture's revenues increased from $1,236,600 to $1,271,700,
or by 2.8%, for the quarter ended March 31, 1996 as compared to the
corresponding period in 1995. Of the $35,100 increase in revenues, $36,600 was
due to increases in regulated service rates permitted under the 1992 Cable Act
that were implemented by the Partnership in April 1995 and $7,400 resulted from
increases in other revenue producing items. These increases were partially
offset by a $8,900 decrease in the number of subscriptions for service.
Service costs increased from $432,500 to $467,200, or by 8.0%, for the
quarter ended March 31, 1996 as compared to the corresponding period in 1995.
Service costs represent costs directly attributable to providing cable services
to customers. Of the $34,700 increase, $12,800 was due to an increase in
personnel costs, $12,700 was due to a decrease in capitalization of labor and
overhead expense resulting from fewer capital projects during the 1996 period,
$7,700 was due to an increase in copyright fees and $5,200 was due to an
increase in programming fees. These increases were partially offset by a $9,600
decrease in repair and maintenance expense.
General and administrative expenses increased from $133,800 to
$199,200, or by 48.9%, for the quarter ended March 31, 1996 as compared to the
corresponding period in 1995. Of the $65,400 increase, $20,000 was due to
expenses allocated by an affiliate of the General Partner (for operational
management services), $14,300 was due to higher insurance premiums, $9,400 was
due to an increase in marketing expense, $8,900 was due to an increase in
personnel costs and $4,800 was due to an increase in bad debt expense.
Management fees and reimbursed expenses decreased from $150,000 to
$136,900, or by 8.7%, for the quarter ended March 31, 1996 as compared to the
corresponding period in 1995. Of the $13,100 decrease, $14,900 was due to a
decrease in reimbursed expenses allocated by the Corporate General Partner
including lower allocated office rent, marketing expense, personnel costs and
telephone expense, partially offset by a $1,800 increase in management fees in
direct relation to increased revenues as described above.
Depreciation and amortization expense decreased by $98,500 from
$457,600 to $359,100, or by 21.5%, for the quarter ended March 31, 1996 as
compared to the corresponding period in 1995 due to the effect of certain
tangible assets becoming fully depreciated and certain intangible assets
becoming fully amortized.
-11-
<PAGE> 12
ENSTAR INCOME PROGRAM IV-1, L.P.
RESULTS OF OPERATIONS (Continued)
Operating income increased by $46,600 from $62,700 to $109,300, or by
74.3%, for the quarter ended March 31, 1996 as compared to the corresponding
period in 1995, principally due to decreased depreciation and amortization and
increased revenues as described above.
Interest income, net of interest expense, increased by $1,200 from
$7,400 to $8,600, or by 16.2%, for the quarter ended March 31, 1996 as compared
to the corresponding period in 1995 due to higher average cash balances
available for investment.
Operating income before depreciation and amortization (EBITDA) as a
percentage of revenues decreased from 42.1% to 36.8% for the quarter ended March
31, 1996 as compared to the corresponding period in 1995. The decrease was
primarily caused by increased general and administrative expenses as described
above. Accordingly, EBITDA decreased from $520,300 to $468,400, or by 10.0%, for
the quarter ended March 31, 1996 as compared to the corresponding period in
1995.
THE MACOUPIN JOINT VENTURE
The Joint Venture's revenues increased from $399,100 to $425,200, or by
6.5%, for the quarter ended March 31, 1996 as compared to the corresponding
period in 1995. Of the $26,100 increase in revenues, $24,600 was due to
increases in regulated service rates permitted under the 1992 Cable Act that
were implemented by the Partnership in April 1995 and $2,500 resulted from
increases in other revenue producing items. These increases were partially
offset by a $1,000 decrease in the number of subscriptions for service.
Service costs increased from $125,900 to $129,600, or by 2.9%, for the
quarter ended March 31, 1996 as compared to the corresponding period in 1995.
Service costs represent costs directly attributable to providing cable services
to customers. Of the $3,700 increase, $5,500 was due to an increase in
programming fees charged by program suppliers (including primary satellite
fees), $4,400 was due to an increase in personnel costs and $1,600 was due to an
increase in system power costs. These increases were partially offset by an
increase of $6,200 in capitalization of labor and overhead expense and a $2,600
decrease in repair and maintenance expense. The increase in programming expenses
was also due to expanded programming usage relating to channel line-up
restructuring and to retransmission consent arrangements implemented to comply
with the 1992 Cable Act.
General and administrative expenses increased from $32,600 to $41,300,
or by 26.7%, for the quarter ended March 31, 1996 as compared to the
corresponding period in 1995. Of the $8,700 increase, $4,000 was due to an
increase in bad debt expense, $2,200 was due to an increase in customer billing
expense and $2,100 was due to an increase in personnel costs.
Management fees and reimbursed expenses decreased from $55,300 to
$54,300, or by 1.8%, for the quarter ended March 31, 1996 as compared to the
corresponding period in 1995. Of the $1,000 decrease, $2,300 was due to a
decrease in reimbursed expenses allocated by the Corporate General Partner
including lower allocated office rent, marketing expense and telephone expense.
These decreases were partially offset by a $1,300 increase in management fees in
direct relation to increased revenues as described above.
-12-
<PAGE> 13
ENSTAR INCOME PROGRAM IV-1, L.P.
RESULTS OF OPERATIONS (Concluded)
Depreciation and amortization expense decreased by $10,500 from
$162,300 to $151,800, or by 6.5%, for the quarter ended March 31, 1996 as
compared to the corresponding period in 1995 due to the effect of certain
tangible assets becoming fully depreciated and certain intangible assets
becoming fully amortized.
Operating income increased by $25,200 from $23,000 to $48,200, or by
110%, for the quarter ended March 31, 1996 as compared to the corresponding
period in 1995, principally due to decreased depreciation and amortization and
increased revenues as described above.
Interest income, net of interest expense, increased by $2,300 from
$6,000 to $8,300, or by 38.3%, for the quarter ended March 31, 1996 as compared
to the corresponding period in 1995 due to higher average cash balances
available for investment.
Operating income before depreciation and amortization (EBITDA) as a
percentage of revenues increased from 46.4% to 47.0% for the quarter ended March
31, 1996 as compared to the corresponding period in 1995. The increase was
primarily caused by increased revenues as described above. Accordingly, EBITDA
increased from $185,300 to $200,000, or by 7.9%, for the quarter ended March 31,
1996 as compared to the corresponding period in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The FCC's amended rate regulation rules were implemented during the
quarter ended September 30, 1994. Compliance with these rules has had a negative
impact on the Partnership's revenues and cash flow.
The Partnership's primary objective, having invested its net offering
proceeds in the Joint Ventures, is to distribute to its partners all available
cash flow from operations and proceeds from the sale of cable systems, after
providing for expenses, debt service and capital requirements relating to the
expansion, improvement and upgrade of the Joint Ventures' cable systems. The
Joint Ventures rely upon the availability of cash generated from operations and
possible borrowings to fund their ongoing capital requirements. In general,
these requirements involve expansion, improvement and upgrade of the Joint
Ventures' existing cable television systems. The Joint Ventures have budgeted
capital expenditures of approximately $1,242,000 in 1996 of which the
Partnership's pro-rata share will approximate $446,000 for line extensions,
rebuild and upgrades of existing cable plant. Management believes that cash
generated by the Joint Ventures' operations in 1996, together with available
borrowings, will be adequate to fund capital expenditures and allow for
continued distributions to partners. Management also believes, however, that it
is essential to preserve liquidity by reserving cash for future rebuild
requirements, including a planned rebuild in the community of Auburn, Illinois
which is expected to cost approximately $1,500,000.
The Partnership paid distributions totaling $126,200 during the three
months ended March 31, 1996. However, there can be no assurance regarding the
level, timing or continuation of future distributions beyond 1996.
-13-
<PAGE> 14
ENSTAR INCOME PROGRAM IV-1, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONCLUDED)
In December, 1993 the Partnership obtained from a lender a $2,100,000
revolving bank credit agreement (the "Facility") maturing on December 31, 1998.
Loans under the Facility are secured by substantially all of the Partnership's
assets. Interest is payable at the Base Rate plus 1.5%. "Base Rate" means the
higher of the lender's prime rate or the Federal Funds Effective Rate plus 1/2%.
The Facility provides for quarterly reductions of the maximum commitment
beginning September 30, 1995, payable at the end of each fiscal quarter. The
Partnership will be permitted to prepay amounts outstanding under the Facility
at any time without penalty, and is able to re-borrow 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
1/2% per year on the unused portion of the Facility. The Facility contains
certain financial tests and other covenants including, among others,
restrictions on capital expenditures, incurrence of indebtedness, distributions
and investments, sale of assets, acquisitions, and other covenants, defaults and
conditions. The Partnership believes that it was in compliance with the loan
covenants at March 31, 1996. Its commitment will decrease by $400,000 in 1996 to
$1,600,000 and since the outstanding amount at March 31, 1996 is $1,008,925, no
principal payments of debt are due in 1996.
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
Operating activities provided net cash of $13,300 during the three
months ended March 31, 1996 as compared with the prior year period when
operating activities used net cash totaling $33,300. The change was primarily
due to a $35,700 increase in receivables from affiliates and a $13,800 increase
in cash provided to pay liabilities owed to the General Partner and third-party
creditors in the 1996 period. Cash generated by Partnership operations decreased
by $2,900 in the three months ended March 31, 1996 after adding back non-cash
items consisting of amortization of deferred loan costs and equity in net income
of Joint Ventures.
Cash provided by investing activities increased by $580,000 during the
three months ended March 31, 1996 as compared to the same three months in 1995
due to an increase in distributions from the Joint Ventures.
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 it is able to increase its service rates
periodically, of which there can be no assurance.
-14-
<PAGE> 15
ENSTAR INCOME PROGRAM IV-1, L.P.
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) None
(b) No Reports on Form 8-K were filed during the quarter
for which this report is filed.
-15-
<PAGE> 16
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 IV-1, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: May 9, 1996 By: /s/ Michael K. Menerey
----------------------
Michael K. Menerey,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT MARCH 31, 1996, AND THE STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 470,300
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,615,000
<CURRENT-LIABILITIES> 25,100
<BONDS> 1,008,900
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,615,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 7,900
<OTHER-EXPENSES> (1,800)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,000
<INCOME-PRETAX> 41,600
<INCOME-TAX> 0
<INCOME-CONTINUING> 41,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,600
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 0
</TABLE>
