<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, 1998
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
CENCOM CABLE INCOME PARTNERS, L.P.
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(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
- ----------------------------------- -----
(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, 1998
INDEX
<TABLE>
<CAPTION>
Page
Part I. Financial Information
<S> <C> <C> <C>
Item 1. Financial Statements
a. Statements of Assets and Liabilities in Liquidation - as of March 31, 1998 and 3
December 31, 1997
b. Statements of Changes in Assets and Liabilities in Liquidation - for the three months 4
ended March 31, 1998 and 1997
c. Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Part II. Other Information
Item 1. Legal Proceedings 8
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 9
Signature Page 10
</TABLE>
2
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CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENTS OF ASSETS AND LIABILITIES IN LIQUIDATION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
<S> <C> <C>
ASSETS, at estimated realizable values:
Cash and cash equivalents $5,758,234 $5,348,312
Insurance receivable 176,081 537,026
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Total Assets 5,934,315 5,885,338
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LIABILITIES, at estimated settlement amounts:
Accrued costs of liquidation 674,623 808,858
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Total liabilities 674,623 808,858
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NET ASSETS IN LIQUIDATION $5,259,692 $5,076,480
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</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
CENCOM CABLE INCOME PARTNERS, L.P.
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES IN LIQUIDATION
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
1998 1997
CHANGE IN ASSETS AND LIABILITIES IN LIQUIDATION:
<S> <C> <C>
Interest income generated from investments $ 74,930 $ 112,320
(Increase)/Decrease in accrued costs of liquidation 108,282 (100,000)
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Net change in assets and liabilities 183,212 12,320
NET ASSETS IN LIQUIDATION, beginning of period 5,076,480 4,883,719
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NET ASSETS IN LIQUIDATION, end of period $5,259,692 $ 4,896,039
========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
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, 1998, and December 31, 1997 have been stated at
estimated realizable values and the liabilities have been reflected at estimated
settlement amounts.
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,
1997. Interim results are not necessarily indicative of results for a full year.
3. 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 plaintiffs
on their behalf and on behalf of the Limited Partners. The Action names as
defendants the General Partner, purchasing affiliates identified in the
disclosure statement (the "Disclosure Statement") distributed to Limited
Partners in connection with the solicitation of consents to the sale of the
Partnership's systems (the "Sale Transaction"), Charter and certain individuals,
including the directors and executive officers of the General Partner.
The Action (as originally filed) alleged, 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 defendants' 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.
5
<PAGE> 6
In October 1996, the plaintiffs 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. In January 1997, the defendants filed
a Motion for Summary Judgment to dismiss all remaining claims as to all parties
in the Action. In October 1997, an order was issued granting in part and denying
in part the defendants' Motion for Summary Judgment, the effect of which
narrowed the remaining issues significantly. Based upon, among other things, the
advice of counsel, the General Partner believes that the remaining portions of
the Amended Complaint are legally inadequate and intends to contest them
vigorously. There can be no assurance, however, that the plaintiff will not be
awarded damages in connection with the Action.
On March 17, 1998, plaintiffs filed a Motion for Leave to Serve Supplemental
Complaint and a Motion for Preliminary Injunction and Permanent Injunction. In
those motions plaintiffs seek to enjoin Cencom Properties, its affiliates and
all other defendants from advancing to themselves any partnership funds for
payment of legal expenses in connection with the defense of the Action and
enjoining the defendants to return to the Partnership and distribute to the
Limited partners all sums advanced to the defendants for the purpose of paying
legal expenses in connection with the defense of the Action.
As of March 31, 1998, the Partnership has recorded a receivable (net of the
deductible) from its insurance company for reimbursement of litigation costs
through March 31, 1998, incurred in connection with the Action. The receivable
of $176,081 represents all litigation costs less the deductible of $100,000. In
April 1998, the partnership has received an additional $48,000 for reimbursement
of litigation costs.
6
<PAGE> 7
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.
Changes in Assets and Liabilities in Liquidation
Net assets in liquidation at March 31, 1998 were approximately $5.3 million,
consisting of cash and cash equivalents of approximately $5.8 million and an
insurance receivable of $176,000, offset by accrued liquidation costs of
approximately $675,000. The net change in assets and liabilities during the
quarter ended March 31, 1998 was approximately $183,000, which is the result of
the increase in the cash and cash equivalents balance due to interest income
earned by the Partnership and a decrease 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, 1998 financial
statements.
7
<PAGE> 8
Part II. Other Information
Item 1. Legal Proceedings
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 plaintiffs
on their behalf and on behalf of the Limited Partners. The Action names as
defendants the General Partner, purchasing affiliates identified in the
disclosure statement (the "Disclosure Statement") distributed to Limited
Partners in connection with the solicitation of consents to the sale of the
Partnership's systems (the "Sale Transaction"), Charter and certain individuals,
including the directors and executive officers of the General Partner.
The Action (as originally filed) alleged, 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 defendants' 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 plaintiffs 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. In January 1997, the defendants filed
a Motion for Summary Judgment to dismiss all remaining claims as to all parties
in the Action. In October 1997, an order was issued granting in part and denying
in part the defendants' Motion for Summary Judgment, the effect of which
narrowed the remaining issues significantly. Based upon, among other things, the
advice of counsel, the General Partner believes that the remaining portions of
the Amended Complaint are legally inadequate and intends to contest them
vigorously. There can be no assurance, however, that the plaintiff will not be
awarded damages in connection with the Action.
On March 17, 1998, plaintiffs filed a Motion for Leave to Serve Supplemental
Complaint and a Motion for Preliminary Injunction and Permanent Injunction. In
those motions plaintiffs seek to enjoin Cencom Properties, its affiliates and
all other defendants from advancing to themselves any partnership funds for
payment of legal expenses in connection with the defense of the Action and
enjoining the defendants to return to the Partnership and distribute to the
Limited partners all sums advanced to the defendants for the purpose of paying
legal expenses in connection with the defense of the Action.
As of March 31, 1998, the Partnership has recorded a receivable (net of the
deductible) from its insurance company for reimbursement of litigation costs
through March 31, 1998, incurred in connection with the Action. The receivable
of $176,081 represents all litigation costs less the deductible of $100,000.
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
8
<PAGE> 9
Item 6. Exhibits and Reports on Form 8-k
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K-None
9
<PAGE> 10
CENCOM CABLE INCOME PARTNERS, L.P.
FOR QUARTER ENDED MARCH 31, 1998
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
/s/ Jerald L. Kent
----------------------------------
Jerald L. Kent
Executive Vice President and
Chief Financial Officer
By: /s/Jerald L. Kent May 13, 1998
----------------------------
Jerald L. Kent
Executive Vice President and
Chief Financial Officer
By: /s/Ralph G. Kelly May 13, 1998
----------------------------
Ralph G. Kelly
Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 5,758,234
<SECURITIES> 0
<RECEIVABLES> 176,081
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,934,315
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,934,315
<CURRENT-LIABILITIES> 674,623
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,259,692
<TOTAL-LIABILITY-AND-EQUITY> 5,934,315
<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>
