<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 transaction period from to
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Commission File Number 0-14093
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CENCOM CABLE INCOME PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 43-1415278
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
12444 Powerscourt Drive - Suite 400
St. Louis, Missouri 63131
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(Address of Principal Executive Offices) (Zip Code)
(Registrant's telephone number, including area code) (314) 965-0555
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
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CENCOM CABLE INCOME PARTNERS, L.P.
FORM 10-Q - FOR THE QUARTER ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements
a. Statement of Assets and Liabilities in Liquidation - as of March 31, 1997 and 3
December 31, 1996
b. Statement of Changes in Assets and Liabilities in Liquidation - for the three months 4
ended March 31, 1997 and for the period from March 29, 1996 to March 31, 1996
c. Statement of Operations - For the Period From January 1, 1996
through March 28, 1996 5
d. Statement of Cash flows - For the Period From January 1, 1996 through
March 28, 1996 6
e. Notes to Financial Statements 7
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Part II. Other Information
Item 1. Legal Proceedings - None -
Item 2. Change in Securities - None -
Item 3. Defaults upon Senior Securities - None -
Item 4. Submission of Matters to a Vote of Security Holders - None -
Item 5. Other Information - None -
Item 6. Exhibits and Reports on Form 8-K - None -
Signature Page 10
</TABLE>
2
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CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENT OF ASSETS AND LIABILITIES IN LIQUIDATION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS, at estimated realizable values:
Cash and cash equivalents $ 7,108,149 $ 7,049,771
Insurance receivable 428,000 428,000
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Total Assets 7,536,149 7,477,771
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LIABILITIES, at estimated settlement amounts:
Accrued costs of liquidation 1,499,446 1,453,388
Income taxes withheld on behalf of Limited Partners 1,140,664 1,140,664
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Total liabilities 2,640,110 2,594,052
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NET ASSETS IN LIQUIDATION $ 4,896,039 $ 4,883,719
=========== ============
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE> 4
CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES IN LIQUIDATION
(Unaudited)
<TABLE>
<CAPTION>
For the Three For the Period from
Months Ended March 29, 1996
March 31, 1997 to March 31, 1996
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<S> <C> <C>
NET PROCEEDS FROM PURCHASING AFFILIATES $ --- $211,321,760
Less - proceeds representing interest to partners --- (5,202,207)
ASSETS SOLD TO AND LIABILITIES ASSUMED BY THE PURCHASING
AFFILIATES AS OF THE CLOSING DATE:
Cash and cash equivalents --- (3,504,678)
Accounts receivable, net --- (795,144)
Prepaid expenses and other --- (161,771)
Note receivable from General Partner --- (753,556)
Property and equipment, net --- (39,506,499)
Franchise costs, net --- (2,983,401)
Accounts payable and accrued expenses --- 3,052,296
Payables to General Partner and affiliate --- 727,882
Subscriber deposits and prepayments --- 281,779
Deferred revenue --- 183,044
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Net assets sold --- (43,460,048)
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Gain on Sale of Assets --- 162,659,505
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Interest paid by the Purchasing Affiliates --- 5,202,207
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CHANGE IN ASSETS AND LIABILITIES IN LIQUIDATION:
Interest income generated from investments 112,320 ---
Decrease in long-term debt --- 74,000,000
Receivables from Purchasing Affiliates --- (231,336)
Cash and cash equivalents held on behalf of Purchasing
Affiliates --- 2,998,420
Increase in accrued costs of liquidation (100,000) (346,494)
Payable to Purchasing Affiliates --- (2,767,084)
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12,320 73,653,506
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REPAYMENT OF LONG-TERM DEBT --- (74,000,000)
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Net change in assets and liabilities 12,320 167,515,218
PARTNERS' CAPITAL (DEFICIT):
General Partner --- 905,039
Limited Partner --- (32,002,952)
NET ASSETS IN LIQUIDATION, beginning of period 4,883,719 ---
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NET ASSETS IN LIQUIDATION, end of period $ 4,896,039 $136,417,305
============== ============
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE> 5
CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Period from
January 1, 1996 through
March 28, 1996*
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<S> <C>
SERVICE REVENUES $ 11,878,555
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OPERATING EXPENSES:
Operating, general and
administrative 6,004,464
Liquidation costs 157,147
Depreciation and amortization 2,816,999
Management Fees - Related Party 594,268
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9,572,878
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Income from operations 2,305,677
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INTEREST INCOME (EXPENSE):
Interest income 42,351
Interest expense (1,290,734)
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(1,248,383)
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Net income $ 1,057,294
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NET INCOME PER LIMITED PARTNERSHIP UNIT $ 7.09
=============
AVERAGE NUMBER OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 149,204
=============
</TABLE>
* Operating activity for the period from January 1, 1996, through March 28,
1996, is prior to liquidation basis adjustments.
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Period from
January 1, 1996
through March 28,
1996*
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<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,057,294
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Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization 2,816,999
Changes in assets and liabilities-
Accounts receivable, net 122,963
Prepaid expenses and other 26,143
Accounts payable and accrued expenses (1,063,219)
Payable to General Partner and affiliate 9,375
Subscriber deposits and prepayments (19,055)
Deferred revenue (4,913)
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Net cash provided by operating activities 2,945,587
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment, net (1,402,127)
Other --
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Net cash used in investing activities (1,402,127)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Limited Partners' distributions --
Repayments on long-term debt (2,500,000)
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Net cash used in financing activities (2,500,000)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (956,540)
CASH AND CASH EQUIVALENTS, beginning of period 4,461,218
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CASH AND CASH EQUIVALENTS, end of period $ 3,504,678
===========
</TABLE>
* Operating activity for the period from January 1, 1996, through March 28,
1996, is prior to liquidation basis adjustments.
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
CENCOM CABLE INCOME PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION:
The accompanying unaudited financial statements of Cencom Cable Income
Partners, L.P. (the "Partnership") have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted.
On March 29, 1996, the Partnership consummated the sale of all of its cable
television systems. As a result of this transaction, the Partnership changed
its basis of accounting to the liquidation basis on March 29, 1996.
Accordingly, the assets in the accompanying unaudited statement of assets and
liabilities in liquidation as of March 31, 1997, and December 31, 1996 have
been stated at estimated realizable values and the liabilities have been
reflected at estimated settlement amounts.
The unaudited statement of operations and cash flows for the period from
January 1, 1996, through March 28, 1996, report the Partnership's financial
position and results of operations using accounting principles applicable to an
entity under the "going concern" basis of accounting prior to the adoption of
the liquidation basis of accounting.
2. RESPONSIBILITY FOR INTERIM FINANCIAL STATEMENTS:
The accompanying financial statements are unaudited; however, in the opinion of
management, such statements include all adjustments necessary for a fair
presentation of the results for the periods presented. The interim financial
statements should be read in conjunction with the financial statements and
notes thereto contained in the Registrant's Form 10-K for the year ended
December 31, 1996. Interim results are not necessarily indicative of results
for a full year.
3. RECLASSIFICATIONS
Certain reclassifications have been made to the March 31, 1996 financial
statements to conform with the March 31, 1997 presentation.
7
<PAGE> 8
4. LITIGATION:
Certain Limited Partners have instituted litigation in the Chancery Court of
New Castle County, Delaware, which has been consolidated under the name and
style, In re: Cencom Cable Income Partners, L.P. Litigation Civil Action No.
14634 (the "Action"). This class action litigation was purportedly filed by
the plaintiff on his own behalf and on behalf of the Limited Partners. The
Action names as defendants the General Partner, Purchasing Affiliates
identified in the Disclosure Statement distributed to Limited Partners in
connection with the solicitation of consents to the Sale Transaction (the
"Disclosure Statement"), Charter Communications, Inc. and certain individuals,
including the directors and executive officers of the General Partner.
The Action alleges, among other things, that the Disclosure Statement is false
and misleading, wrongfully seeks to induce the consent of the Limited Partners
to the Sale Transaction in breach of the defendants' fiduciary duties, and is
the product and culmination of a course of wrongful conduct designed to enrich
the defendants at the expense of the Limited Partners in breach of the
Partnership Agreement and the defendants' fiduciary duties. On February 15,
1996, the court refused to issue an injunction precluding the Sale Transaction
and granted Defendant's motion to dismiss all claims for injunctive relief,
including claims seeking to require the Partnership to attempt to market the
systems to other parties. The remaining causes of action seek compensation for
plaintiff and other Limited Partners for damages related to the alleged
wrongdoing.
In October 1996, the plaintiff filed a Consolidated Amended Class Action
Complaint (the "Amended Complaint"). In connection with the filing of the
Amended Complaint, the defendants informed the court that portions of the
Amended Complaint were legally inadequate. The defendants filed an Answer to
the Amended Complaint in December 1996. In January 1997, the defendants filed
a Motion for Summary Judgment to dismiss all remaining claims as to all parties
in the Action. The General Partner believes that portions of the Amended
Complaint are legally inadequate and intends to file a dispositive motion as to
all remaining claims in the Action. There can be no assurance, however, that
the plaintiff will not be awarded damages in connection with the Action.
As of March 31, 1997, the Partnership has recorded a receivable (net of the
deductible) from its insurance company for reimbursement of litigation costs
through March 31, 1997, incurred in connection with the Action. The receivable
of $428,000 represents all litigation costs less the deductible of $100,000.
8
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CENCOM CABLE INCOME PARTNERS, L.P.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
The Registrant had no results of operations for the period subsequent to March
28, 1996, as a result of the sale of all of its cable television systems.
Operating results for the period ended March 28, 1996, are included herein;
however, no discussion of the operating results for this period is provided as
such analysis was previously provided in the Form 10-K dated December 31, 1996.
Changes in Assets and Liabilities in Liquidation
Net assets in liquidation at March 31, 1997 were approximately $4.9 million,
consisting of cash and cash equivalents of approximately $7.1 million and an
insurance receivable of $428,000, offset by accrued liquidation costs of
approximately $1.5 million and an income tax liability of $1.1 million. The
net change in assets and liabilities during the quarter ended March 31, 1997
was approximately $12,000, which is primarily the result of the increase in the
cash and cash equivalents balance due to interest income earned by the
Partnership. The increase in the cash and cash equivalent balance was
partially offset by an increase in the accrued costs of liquidation for legal
and accounting services and for investor relations costs.
Final dissolution of the Partnership and related cash distributions to the
Limited Partners and General Partner will occur upon obtaining final resolution
of all liquidation issues, including all pending litigation and insurance
receivable matters. Proceeds ultimately received by the partners upon
liquidation could differ from the amounts recorded in March 31, 1997 financial
statements.
9
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CENCOM CABLE INCOME PARTNERS, L.P.
FOR QUARTER ENDED MARCH 31, 1997
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.
CENCOM CABLE INCOME PARTNERS, L.P.
By: Cencom Properties, Inc.
its General Partner
------------------------------------
Jerald L. Kent
Executive Vice President and
Chief Financial Officer
By: /s/Jerald L. Kent May 13, 1997
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Jerald L. Kent
Executive Vice President and
Chief Financial Officer
By: /s/Ralph G. Kelly May 13, 1997
----------------------------
Ralph G. Kelly
Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 7,108,149
<SECURITIES> 0
<RECEIVABLES> 428,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,536,149
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,536,149
<CURRENT-LIABILITIES> 2,640,110
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,896,039
<TOTAL-LIABILITY-AND-EQUITY> 7,536,149
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
