<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, 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 0-15686
-----------
Enstar Income Program IV-3, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1648320
-------------------------------- -----------------------------
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
10900 Wilshire Boulevard - 15th Floor
Los Angeles, California 90024
- -------------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 824-9990
----------------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
<PAGE> 2
PART I - FINANCIAL INFORMATION
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED BALANCE SHEETS
==========================================
<TABLE>
<CAPTION>
December 31, March 31,
1996* 1997
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 450,900 $ 633,900
Accounts receivable, less allowance of $4,500 and
$5,000 for possible losses 61,800 50,000
Prepaid expenses and other assets 25,900 34,100
Equity in net assets of Joint Venture 601,700 635,000
Property, plant and equipment, less accumulated
depreciation and amortization of $4,087,200 and $4,166,900 1,642,100 1,598,900
Franchise cost, net of accumulated
amortization of $1,850,500 and $1,897,600 714,300 667,200
Deferred loan costs and other, net 7,600 8,100
------------- -------------
$ 3,504,300 $ 3,627,200
============= =============
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
LIABILITIES:
Accounts payable $ 222,000 $ 176,900
Due to affiliates 158,300 246,100
------------- -------------
TOTAL LIABILITIES 380,300 423,000
------------- -------------
COMMITMENTS AND CONTINGENCIES
PARTNERSHIP CAPITAL (DEFICIT):
General partners (52,000) (51,200)
Limited partners 3,176,000 3,255,400
------------- -------------
TOTAL PARTNERSHIP CAPITAL 3,124,000 3,204,200
------------- -------------
$ 3,504,300 $ 3,627,200
============= =============
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
-2-
<PAGE> 3
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED STATEMENTS OF OPERATIONS
=========================================
<TABLE>
<CAPTION>
Unaudited
------------------------------
Three months ended
March 31,
------------------------------
1996 1997
------------- -------------
<S> <C> <C>
REVENUES $ 584,300 $ 665,800
------------- -------------
OPERATING EXPENSES:
Service costs 187,000 202,100
General and administrative expenses 95,800 77,200
General Partner management fees
and reimbursed expenses 71,300 80,800
Depreciation and amortization 177,100 142,100
------------- -------------
531,200 502,200
------------- -------------
OPERATING INCOME 53,100 163,600
------------- -------------
OTHER INCOME (EXPENSE):
Interest income 7,000 5,900
Interest expense (9,100) (1,700)
------------- -------------
(2,100) 4,200
------------- -------------
INCOME BEFORE EQUITY IN NET INCOME
OF JOINT VENTURE 51,000 167,800
EQUITY IN NET INCOME
OF JOINT VENTURE 18,800 38,300
------------- -------------
NET INCOME $ 69,800 $ 206,100
============= =============
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 1.73 $ 5.11
============= =============
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 39,900 39,900
============= =============
</TABLE>
See accompanying notes to condensed financial statements.
-3-
<PAGE> 4
ENSTAR INCOME PROGRAM IV-3, L.P.
STATEMENTS OF CASH FLOWS
========================================
<TABLE>
<CAPTION>
Unaudited
------------------------------
Three months ended
March 31,
------------------------------
1996 1997
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 69,800 $ 206,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in net income of Joint Venture (18,800) (38,300)
Distributions from Joint Venture 200,000 5,000
Depreciation and amortization 177,100 142,100
Amortization of deferred loan costs 2,700 -
Increase (decrease) from changes in:
Accounts receivable, prepaid expenses and other assets 17,400 3,600
Accounts payable and due to affiliates (340,800) 42,700
------------- -------------
Net cash provided by operating activities 107,400 361,200
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (58,100) (49,200)
Increase in intangible assets (4,500) (3,100)
------------- -------------
Net cash used in investing activities (62,600) (52,300)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt (383,200) -
Distributions to partners (125,900) (125,900)
------------- -------------
Net cash used in financing activities (509,100) (125,900)
------------- -------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (464,300) 183,000
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 942,400 450,900
------------- -------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 478,100 $ 633,900
============= =============
</TABLE>
See accompanying notes to condensed financial statements.
-4-
<PAGE> 5
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
============================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
months ended March 31, 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 months ended March 31, 1997 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")
for a monthly management fee of 5% of revenues, excluding revenues from the sale
of cable television systems or franchises. Management fee expense approximated
$33,300 for the three months ended March 31, 1997.
In addition to the monthly management fees 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 $47,500 for
the three months ended March 31, 1997.
The Manager has entered into an identical agreement with Enstar Cable of
Macoupin County, a Georgia general partnership, of which the Partnership is a
co-partner (the "Macoupin Joint Venture"), except that the Joint Venture pays
the Manager only a 4% management fee. However, the 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 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 Macoupin Joint Venture, and there
is no duplication of reimbursed expenses or costs of the Manager. The Macoupin
Joint Venture paid the Manager management fees of approximately $19,300 and
reimbursement of expenses of approximately $47,100 under its management
agreement for the three months ended March 31, 1997. In addition, the Macoupin
Joint Venture paid the Corporate General Partner approximately $4,800 in respect
of its 1% special interest during the three months ended March 31, 1997.
Management fees and reimbursed expenses due the Corporate General Partner are
non-interest bearing.
-5-
<PAGE> 6
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
==============================================
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (CONCLUDED)
The Partnership and the Macoupin Joint Venture also receive certain
system 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 the Partnership's and Joint Venture's cable
systems. The Partnership and the Joint Venture reimburse the affiliate for their
allocable share of the affiliate's operational costs. The total amount charged
to the Partnership and the Joint Venture approximated $8,600 for the three
months ended March 31, 1997. No management fee is payable to the affiliate by
the Partnership and 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 Partnership and the Macoupin Joint Venture. In turn, the affiliate charges
the Partnership and the Joint Venture 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 and the Joint Venture recorded programming fee expense of $254,400
for the three months ended March 31, 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 are allocated 99% to the limited partners and 1% to
the general partners.
4. RECLASSIFICATIONS
Certain 1996 amounts have been reclassified to conform to the 1997
presentation.
-6-
<PAGE> 7
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
==============================================
5. EQUITY IN NET ASSETS OF JOINT VENTURE
Each of the Partnership and two affiliated partnerships (Enstar Income
Program IV-1, L.P. and Enstar Income Program IV-2, 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, 1997 and December 31, 1996, and the results of its operations
for the three months ended March 31, 1997 and 1996, have been included. The
results of operations for the three months ended March 31, 1997 are not
necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
December 31, March 31,
1996* 1997
------------- -------------
(Unaudited)
<S> <C> <C>
Current assets $ 528,400 $ 667,700
Investment in cable television
properties, net 1,550,400 1,497,800
Other assets 5,600 5,100
------------- -------------
$ 2,084,400 $ 2,170,600
============= =============
Current liabilities $ 279,300 $ 265,500
Venturers' capital 1,805,100 1,905,100
------------- -------------
$ 2,084,400 $ 2,170,600
============= =============
</TABLE>
*As presented in the audited financial statements.
-7-
<PAGE> 8
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONCLUDED)
==================================================
5. EQUITY IN NET ASSETS OF JOINT VENTURE (CONCLUDED)
<TABLE>
<CAPTION>
Unaudited
------------------------------
Three months ended
March 31,
------------------------------
1996 1997
------------- -------------
<S> <C> <C>
REVENUES $ 425,200 $ 481,600
------------- -------------
OPERATING EXPENSES:
Service costs 129,600 130,000
General and administrative expenses 41,300 14,100
General Partner management fees and reimbursed expenses 54,300 71,200
Depreciation and amortization 151,800 154,600
------------- -------------
377,000 369,900
------------- -------------
OPERATING INCOME 48,200 111,700
OTHER INCOME (EXPENSE):
Interest income 9,400 5,700
Interest expense (1,100) (2,400)
------------- -------------
NET INCOME $ 56,500 $ 115,000
============= =============
</TABLE>
-8-
<PAGE> 9
ENSTAR INCOME PROGRAM IV-3, 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. 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 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.
The Partnership conducts its cable television business operations both
(i) through the direct ownership and operation of certain cable television
systems and (ii) through its participation as a partner with a one-third (1/3)
interest in Enstar Cable of Macoupin County. The Partnership participates
equally with its two affiliated co-partners under the Joint Venture's
partnership agreement with respect to capital contributions, obligations and
commitments and results of operations. Accordingly, in considering the financial
condition and results of operations for the Partnership, consideration must also
be made of those matters as they relate to the Joint Venture. The following
discussion reflects such consideration, and with respect to results of
operations, a separate discussion is provided for each entity.
RESULTS OF OPERATIONS
THE PARTNERSHIP
The Partnership's revenues increased from $584,300 to $665,800, or by
14.0%, for the quarter ended March 31, 1997 as compared to the corresponding
period in 1996. Of the $81,500 increase, $52,500 was due to increases in
regulated service rates that were implemented by the Partnership in the second
and fourth quarters of 1996, $22,200 was due to the restructuring of The Disney
Channel from a premium channel to a tier channel effective July 1, 1996, $3,700
was due to increases in other revenue producing items and $3,100 was
-9-
<PAGE> 10
ENSTAR INCOME PROGRAM IV-3, L.P.
RESULTS OF OPERATIONS (CONTINUED)
due to an increase in the number of subscriptions for basic and premium
services. As of March 31, 1997, the Partnership had approximately 6,200 homes
subscribing to cable service and 2,000 premium service units.
Service costs increased from $187,000 to $202,100, or by 8.1%, for the
quarter ended March 31, 1997 as compared to the corresponding period in 1996.
Service costs represent costs directly attributable to providing cable services
to customers. Of the $15,100 increase, $20,400 was due to an increase in
programming fees (including primary satellite fees) and $4,100 was due to a
decrease in capitalization of labor and overhead expense resulting from fewer
capital projects during the 1997 quarter. These increases were partially offset
by an $8,000 decrease in direct personnel costs due to the transfer of an
employee to the Corporate General Partner's operations in August 1996 and other
staff reductions. The increase in programming fees for the year ended December
31, 1996 included a $5,100 increase related to the restructuring of The Disney
Channel discussed above.
General and administrative expenses decreased from $95,800 to $77,200,
or by 19.4%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996. Of the $18,600 decrease, $12,100 was due to lower
insurance premiums and $6,800 was due to a decrease in personnel costs.
Management fees and reimbursed expenses increased from $71,300 to
$80,800, or by 13.3%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996. Of the $9,500 increase, reimbursed expenses
increased by $5,400, primarily due to higher allocated personnel costs resulting
from staff additions and wage increases. Management fees increased by $4,100 in
direct relation to increased revenues as described above.
Depreciation and amortization expense decreased from $177,100 to
$142,100, or by 19.8%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996, due to certain tangible assets becoming fully
depreciated and certain intangible assets becoming fully amortized.
Operating income increased from $53,100 to $163,600 for the quarter
ended March 31, 1997 as compared to the corresponding period in 1996, primarily
due to increased revenues and decreased depreciation and amortization as
described above.
Interest income decreased from $7,000 to $5,900, or by 15.7%, for the
quarter ended March 31, 1997 as compared to the corresponding period in 1996 due
to lower average cash balances available for investment.
Interest expense decreased from $9,100 to $1,700, or by 81.3%, for the
quarter ended March 31, 1997 as compared to the corresponding period in 1996 due
to the repayment of the Partnership's note payable in February 1996.
Due to the factors described above, the Partnership's net income
increased from $69,800 to $206,100 for the quarter ended March 31, 1997 as
compared to the corresponding period in 1996.
-10-
<PAGE> 11
ENSTAR INCOME PROGRAM IV-3, L.P.
RESULTS OF OPERATIONS (CONTINUED)
DISTRIBUTIONS TO PARTNERS
The Partnership distributed $125,900 to its partners during the three
months ended March 31, 1997. The Joint Venture distributed $5,000 to the
Partnership during the three months ended March 31, 1997.
THE MACOUPIN JOINT VENTURE
The Joint Venture's revenues increased from $425,200 to $481,600, or by
13.3%, for the quarter ended March 31, 1997 as compared to the corresponding
period in 1996. Of the $56,400 increase, $34,200 was due to increases in
regulated service rates that were implemented by the Joint Venture in the second
and fourth quarters of 1996, $16,300 was due to the restructuring of The Disney
Channel from a premium channel to a tier channel effective July 1, 1996, $4,300
was due to increases in other revenue producing items including advertising
sales and $1,600 was due to an increase in the number of subscriptions for basic
service. As of March 31, 1997, the Joint Venture had approximately 4,500 homes
subscribing to cable service and 1,700 premium service units.
Service costs remained relatively unchanged increasing from $129,600 to
$130,000 (less than one percent) for the quarter ended March 31, 1997 as
compared to the corresponding period in 1996. Service costs represent costs
directly attributable to providing cable services to customers.
General and administrative expenses decreased from $41,300 to $14,100,
or by 65.9%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996. Of the $27,200 decrease, $12,700 was due to an
increase in capitalization of labor and overhead expense resulting from the
rebuild of the Partnership's Auburn, Illinois cable system, $8,300 was due a
decrease in personnel costs, $2,900 was due to a decrease in customer billing
expense and $2,500 was due to a decrease in bad debt expense.
Management fees and reimbursed expenses increased from $54,300 to
$71,200, or by 31.1%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996. Of the $16,900 increase, reimbursable expenses
increased by $14,100, primarily due to higher allocated personnel costs
resulting from staff additions and wage increases. Management fees increased by
$2,800 in direct relation to increased revenues as described above.
Depreciation and amortization expense increased from $151,800 to
$154,600, or by 1.8%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996 due to asset additions related to the upgrade of
the Joint Venture's plant.
Operating income increased from $48,200 to $111,700 for the quarter
ended March 31, 1997 as compared to the corresponding period in 1996, primarily
due to increased revenues as described above.
Interest income, net of interest expense, decreased from $8,300 to
$3,300, or by 60.2%, for the quarter ended March 31, 1997 as compared to the
corresponding period in 1996 due to lower average cash balances available for
investment.
-11-
<PAGE> 12
ENSTAR INCOME PROGRAM IV-3, L.P.
RESULTS OF OPERATIONS (CONCLUDED)
Due to the factors described above, the Joint Venture's net income
increased from $56,500 to $115,000 for the quarter ended March 31, 1997 as
compared to the corresponding period in 1996.
Operating income before depreciation and amortization (EBITDA) as a
percentage of revenues increased from 47.0% to 55.3% for the quarter ended March
31, 1997 as compared to the corresponding period in 1996. EBITDA increased from
$200,000 to $266,300, or by 33.2%, for the quarter ended March 31, 1997 as
compared to the corresponding period in 1996, primarily due to increased
revenues as described above.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary objective, having invested its net offering
proceeds in cable systems and the Joint Venture, is to distribute to its
partners all available cash flow from operations and proceeds from the sale of
cable systems, if any, after providing for expenses, debt service and capital
requirements relating to the expansion, improvement and upgrade of its cable
systems. The Partnership relies upon the availability of cash generated from
operations and possible borrowings to fund its ongoing expenses and capital
requirements. In general, these requirements involve expansion, improvement and
upgrade of the Partnership's existing cable television systems. In March, the
Partnership completed the initial construction phase of the franchise-required
rebuild of its Shelbyville, Illinois cable system and the rebuild of its cable
systems in surrounding communities. However, completion of the entire project
and the introduction of addressability will be delayed until completion of
rebuild projects in other nearby communities that involve consolidating the
Shelbyville headend. Rebuild expenditures totaled $28,200 in the first three
months of 1997. Total rebuild costs are expected to approximate $419,000 in
1997. Additionally, the Joint Venture is required to rebuild its Auburn,
Illinois cable system as a condition of its franchise agreement. Construction
began in July 1996 and is expected to be completed in the second half of 1997.
Capital expenditures related to the rebuild approximated $226,000 in 1996, with
additional construction costs of $153,000 projected for 1997. The Joint Venture
is also rebuilding portions of its cable systems in surrounding communities at
an estimated total additional cost of approximately $770,000, which includes
budgeted expenditures of approximately $310,000 in 1997 to complete the project.
Rebuild construction costs totaled approximately $90,900 in the first quarter of
1997. The Partnership and the Joint Venture have also budgeted $285,200 and
$217,700, respectively, to upgrade other assets in 1997. Management believes
that existing cash and cash generated by operations of the Partnership and Joint
Venture will be adequate to fund capital expenditures and the continued payment
of distributions in 1997.
The Partnership paid distributions totaling $125,900 during the three
months ended March 31, 1997. However, there can be no assurances regarding the
level, timing or continuation of future distributions.
-12-
<PAGE> 13
ENSTAR INCOME PROGRAM IV-3, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONCLUDED)
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
Operating activities provided $253,800 additional cash during the three
months ended March 31, 1997 as compared with the corresponding prior year
period. The Partnership used $383,500 less cash to pay liabilities owed to the
General Partner and third-party creditors due to timing differences of payments
in the first quarter of 1997 compared with the three months ended March 31,
1996. Partnership operations generated $79,100 more cash in the first quarter of
1997 after adding back non-cash items consisting of depreciation and
amortization and equity in net income of Joint Venture. This was partially
offset by a $195,000 decrease in distributions from the Joint Venture and a
$13,800 decrease in cash provided by changes in accounts receivable, prepaid
expenses and other assets.
The Partnership used $10,300 less cash in investing activities in the
three months ended March 31, 1997 as compared with the prior year period due to
an $8,900 decrease in capital expenditures and a $1,400 decrease in expenditures
for intangible assets. The Partnership used $383,200 less cash in financing
activities during the three months of 1997 as compared to 1996 due to the
repayment of its note payable in February 1996.
Operating income before depreciation and amortization (EBITDA) as a
percentage of revenues increased from 39.4% for the three months ended March 31,
1996 to 45.9% for the three months ended March 31, 1997. The increase was
principally attributable to increased revenues. EBITDA increased from $230,200
to $305,700, or by 32.8%, in the three months ended March 31, 1997 as compared
to the same period in 1996.
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.
-13-
<PAGE> 14
ENSTAR INCOME PROGRAM IV-3, L.P.
<TABLE>
<S> <C>
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) None
(b) The Registrant filed a Form 8-K dated March 11,
1997, in which it reported under Item 5 that an
unsolicited offer to purchase partnership units had
been made without the consent of the Corporate
General Partner.
</TABLE>
<PAGE> 15
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-3, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: May 12, 1997 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, 1997, AND THE STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 633,900
<SECURITIES> 0
<RECEIVABLES> 55,000
<ALLOWANCES> 5,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,765,800
<DEPRECIATION> 4,166,900
<TOTAL-ASSETS> 3,627,200
<CURRENT-LIABILITIES> 423,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,627,200
<SALES> 0
<TOTAL-REVENUES> 665,800
<CGS> 0
<TOTAL-COSTS> 502,200
<OTHER-EXPENSES> (5,900)
<LOSS-PROVISION> 6,800
<INTEREST-EXPENSE> 1,700
<INCOME-PRETAX> 206,100
<INCOME-TAX> 0
<INCOME-CONTINUING> 206,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 206,100
<EPS-PRIMARY> 5.11
<EPS-DILUTED> 0
</TABLE>
