<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 June 30, 1997
-------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_____________________ to _________________________
Commission File Number 0-16789
---------
Enstar Income/Growth Program Five-B, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1713008
- -------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10900 Wilshire Boulevard - 15th Floor
Los Angeles, California 90024
- ---------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 824-9990
-----------------
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Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
<PAGE> 2
PART I - FINANCIAL INFORMATION
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
CONDENSED BALANCE SHEETS
=================================================
<TABLE>
<CAPTION>
December 31, June 30,
1996* 1997
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash $ 4,500 $ 4,700
Due from affiliates 2,900 1,700
Equity in net assets of Joint Venture 4,294,000 4,280,200
----------- -----------
$ 4,301,400 $ 4,286,600
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
-----------------------------------
LIABILITIES:
Accounts payable $ 16,000 $ 13,500
----------- -----------
PARTNERSHIP CAPITAL (DEFICIT):
General partners (81,200) (81,300)
Limited partners 4,366,600 4,354,400
----------- -----------
TOTAL PARTNERSHIP CAPITAL 4,285,400 4,273,100
----------- -----------
$ 4,301,400 $ 4,286,600
=========== ===========
</TABLE>
*As presented in the audited financial statements.
See accompanying notes to condensed financial statements.
-2-
<PAGE> 3
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
CONDENSED STATEMENTS OF OPERATIONS
=================================================
<TABLE>
<CAPTION>
Unaudited
-----------------------------
Three months ended
June 30,
-----------------------------
1996 1997
----------- ----------
<S> <C> <C>
OPERATING EXPENSES:
General and administrative expenses $ (12,000) $ (5,100)
--------- ----------
OTHER EXPENSE:
Interest expense (400) (500)
--------- ----------
LOSS BEFORE EQUITY IN NET INCOME (LOSS)
OF JOINT VENTURE (12,400) (5,600)
EQUITY IN NET INCOME (LOSS) OF JOINT VENTURE (91,900) 3,000
--------- ----------
NET LOSS $(104,300) $ (2,600)
========= ==========
Net loss allocated to General Partners $ (1,000) $ --
========== =========
Net loss allocated to Limited Partners $(103,300) $ (2,600)
========= ==========
NET LOSS PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ (1.73) $ (0.04)
========= ==========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 59,830 59,830
========= ==========
</TABLE>
See accompanying notes to condensed financial statements.
-3-
<PAGE> 4
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
CONDENSED STATEMENTS OF OPERATIONS
=================================================
<TABLE>
<CAPTION>
Unaudited
----------------------------
Six months ended
June 30,
---------------------------
1996 1997
---------- ---------
<S> <C> <C>
OPERATING EXPENSES:
General and administrative expenses $ (20,600) $ (12,200)
--------- ---------
OTHER EXPENSE:
Interest expense (400) (1,300)
--------- ---------
LOSS BEFORE EQUITY IN NET INCOME (LOSS)
OF JOINT VENTURE (21,000) (13,500)
EQUITY IN NET INCOME (LOSS) OF JOINT VENTURE (203,700) 1,200
--------- ---------
NET LOSS $(224,700) $ (12,300)
========= =========
Net loss allocated to General Partners $ (2,200) $ (100)
========= =========
Net loss allocated to Limited Partners $(222,500) $ (12,200)
========= =========
NET LOSS PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ (3.72) $ (0.20)
========= =========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 59,830 59,830
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
-4-
<PAGE> 5
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
STATEMENTS OF CASH FLOWS
=================================================
<TABLE>
<CAPTION>
Unaudited
----------------------------
Six months ended
June 30,
----------------------------
1996 1997
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(224,700) $ (12,300)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Equity in net (income) loss of Joint Venture 203,700 (1,200)
Increase (decrease) from changes in:
Due from affiliates 4,300 1,200
Accounts payable and due to affiliates 3,700 (2,500)
--------- ---------
Net cash used in operating activities (13,000) (14,800)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from Joint Venture 14,600 15,000
--------- ---------
INCREASE IN CASH 1,600 200
CASH AT BEGINNING OF PERIOD 700 4,500
--------- ---------
CASH AT END OF PERIOD $ 2,300 $ 4,700
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
-5-
<PAGE> 6
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
=======================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for the three
and six months ended June 30, 1997 and 1996 are unaudited. These condensed
interim financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Partnership's latest
Annual Report on Form 10-K. In the opinion of management, such statements
reflect all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of such periods. The results of
operations for the three and six months ended June 30, 1997 are not necessarily
indicative of results for the entire year.
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
The Partnership has a management and service agreement (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) 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
and six months ended June 30, 1997. The Manager has entered into an identical
agreement with Enstar Cable of Cumberland Valley, a Georgia general partnership,
of which the Partnership is co-general partner (the "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 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 to the Manager by the
Partnership in respect of any amounts received by the Partnership from the Joint
Venture, and there is no duplication of reimbursed expenses and costs of the
Manager. The Joint Venture paid the Manager management fees of approximately
$71,200 and $143,300 and reimbursement of expenses of approximately $75,900 and
$147,200 under its management agreement for the three and six months ended June
30, 1997. In addition, the Joint Venture paid the Corporate General Partner
approximately $17,800 and $35,800 in respect of its 1% special interest during
the three and six months ended June 30, 1997. Management fees and reimbursed
expenses due the Corporate General Partner are non-interest bearing.
The Joint Venture also receives certain system operating management
services from affiliates of the Corporate General Partner in addition to the
Manager, due to the fact that there are no such employees directly employed by
the Joint Venture. The Joint Venture reimburses the affiliates for the Joint
Venture's allocable share of the affiliates' operational costs. The total amount
charged to the Joint Venture for these costs approximated $142,400 and $294,000
for the three and six months ended June 30, 1997. No management fee is payable
to the affiliates by the Joint Venture and there is no duplication of reimbursed
expenses and costs paid to the Manager.
-6-
<PAGE> 7
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
=======================================
2. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES (CONCLUDED)
Certain programming services have been purchased through an affiliate of
the Joint Venture. In turn, the affiliate charges 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 Joint Venture recorded programming fee expense
of $333,400 and $666,300 for the three and six months ended June 30, 1997.
Programming fees are included in service costs in the statements of operations.
3. EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Earnings and losses per unit of limited partnership interest is based on
the average number of units outstanding during the periods presented. For this
purpose, earnings and losses have been allocated 99% to the Limited Partners and
1% to the General Partners. The General Partners do not own units of partnership
interest in the Partnership, but rather hold a participation interest in the
income, losses and distributions of the Partnership.
-7-
<PAGE> 8
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
=======================================
5. EQUITY IN NET ASSETS OF JOINT VENTURE
The Partnership and an affiliated partnership (Enstar Income/Growth
Program Five-A, L.P.) each own 50% of the Joint Venture. Each of the co-partners
share equally in the profits and losses of the Joint Venture. The investment in
the Joint Venture is accounted for on the equity method. Summarized financial
information for the Joint Venture as of June 30, 1997 and December 31, 1996 and
the results of its operations for the three and six months ended June 30, 1997
and 1996 have been included. The results of operations for the three and six
months ended June 30, 1997 are not necessarily indicative of results for the
entire year.
<TABLE>
<CAPTION>
December 31, June 30,
1996* 1997
----------- -----------
(Unaudited)
<S> <C> <C>
Current assets $ 2,872,100 $ 1,910,300
Investment in cable television properties, net 12,807,100 11,853,300
Other assets 153,400 124,900
----------- -----------
$15,832,600 $13,888,500
=========== ===========
Current liabilities $ 1,177,400 $ 1,260,800
Long-term debt 6,067,200 4,067,200
Venturers' capital 8,588,000 8,560,500
----------- -----------
$15,832,600 $13,888,500
=========== ===========
</TABLE>
*As presented in the audited financial statements.
-8-
<PAGE> 9
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
=======================================
5. EQUITY IN NET ASSETS OF JOINT VENTURE (CONTINUED)
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Three months ended
June 30,
-------------------------------
1996 1997
----------- -----------
<S> <C> <C>
REVENUES $ 1,658,100 $ 1,780,100
----------- -----------
OPERATING EXPENSES:
Service costs 577,700 620,700
General and administrative expenses 240,100 231,500
General Partner management fees
and reimbursed expenses 154,400 164,900
Depreciation and amortization 708,200 653,400
----------- -----------
1,680,400 1,670,500
----------- -----------
OPERATING INCOME (LOSS) (22,300) 109,600
OTHER INCOME (EXPENSE):
Interest income 18,800 18,700
Interest expense (180,300) (122,300)
----------- -----------
NET INCOME (LOSS) $ (183,800) $ 6,000
=========== ===========
</TABLE>
-9-
<PAGE> 10
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(CONCLUDED)
=======================================
5. EQUITY IN NET ASSETS OF JOINT VENTURE (CONCLUDED)
<TABLE>
<CAPTION>
Unaudited
-------------------------------
Six months ended
June 30,
-------------------------------
1996 1997
----------- -----------
<S> <C> <C>
REVENUES $ 3,249,900 $ 3,582,500
----------- -----------
OPERATING EXPENSES:
Service costs 1,169,400 1,244,900
General and administrative expenses 445,000 468,800
General Partner management fees
and reimbursed expenses 300,300 326,300
Depreciation and amortization 1,412,800 1,317,100
----------- -----------
3,327,500 3,357,100
----------- -----------
OPERATING INCOME (LOSS) (77,600) 225,400
OTHER INCOME (EXPENSE):
Interest income 32,800 45,800
Interest expense (362,600) (268,700)
----------- -----------
NET INCOME (LOSS) $ (407,400) $ 2,500
=========== ===========
</TABLE>
-10-
<PAGE> 11
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, 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 Federal Communications Commission (the
"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.
All of the Partnership's cable television business operations are
conducted through its participation as a partner with a 50% interest in the
Joint Venture. The Partnership participates equally with its affiliated partner
(Enstar Income/Growth Program Five-A, L.P.) under the Joint Venture Agreement
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 Venture. The following discussion reflects
such consideration and provides a separate discussion for each entity.
RESULTS OF OPERATIONS
THE PARTNERSHIP
All of the Partnership's cable television business operations, which
began in January 1988, are conducted through its participation as a partner in
the Joint Venture. The Joint Venture distributed an aggregate of $10,000 and
$15,000 to the Partnership, representing the Partnership's pro rata share of the
cash flow distributed from the Joint Venture's operations during the three and
six months ended June 30, 1997. The Partnership did not pay distributions to its
partners during the three and six months ended June 30, 1997.
-11-
<PAGE> 12
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
RESULTS OF OPERATIONS (CONTINUED)
THE JOINT VENTURE
The Joint Venture's revenues increased from $1,658,100 to $1,780,100, or
by 7.4%, and from $3,249,900 to $3,582,500, or by 10.2%, for the three and six
months ended June 30, 1997 as compared to the corresponding periods in 1996. Of
the $122,000 increase in revenues for the three months ended June 30, 1997 as
compared to the corresponding period in 1996, $157,800 was due to increases in
regulated service rates that were implemented by the Joint Venture in the
second, third and fourth quarters of 1996 and $52,300 was due to the
restructuring of The Disney Channel from a premium channel to a tier channel
effective July 1, 1996. These increases were partially offset by a decrease of
$88,100 due to decreases in the number of subscriptions for basic, premium and
tier services. Of the $332,600 increase in revenues for the six months ended
June 30, 1997 as compared to the corresponding period in 1996, $364,900 was due
to the increases in regulated service rates, $102,300 was due to the
restructuring of The Disney Channel and $20,700 was due to increases in other
revenue producing items. These increases were partially offset by a decrease of
$155,300 due to decreases in the number of subscriptions for basic, premium and
tier services. As of June 30, 1997, the Joint Venture had approximately 17,100
homes subscribing to cable service and 2,900 premium service units.
Service costs increased from $577,700 to $620,700, or by 7.4%, and from
$1,169,400 to $1,244,900, or by 6.5%, for the three and six months ended June
30, 1997 as compared to the corresponding periods in 1996. Service costs
represent costs directly attributable to providing cable services to customers.
Programming expense and franchise fees accounted for the majority of the
increase in both periods. The increase in programming fees was primarily due to
higher rates charged by program suppliers. Franchise fees increased in direct
relation to the increase in revenues discussed above.
General and administrative expenses decreased from $240,100 to $231,500,
or by 3.6%, for the quarter ended June 30, 1997 and increased from $445,000 to
$468,800, or by 5.3%, for the six months ended June 30, 1997 as compared to the
corresponding periods in 1996. The decrease in the quarter was primarily due to
lower insurance premiums and personnel costs while the six month increase was
primarily due to increases in marketing expense and bad debt expense.
Management fees and reimbursed expenses increased from $154,400 to
$164,900, or by 6.8%, and from $300,300 to $326,300, or by 8.7%, for the three
and six months ended June 30, 1997 as compared to the corresponding periods in
1996. Management fees increased in direct relation to increased revenues as
described above. Reimbursed expenses increased primarily due to higher allocated
personnel costs.
Operating income before income taxes, depreciation and amortization
(EBITDA) is a commonly used financial analysis tool for measuring and comparing
cable television companies in several areas, such as liquidity, operating
performance and leverage. EBITDA as a percentage of revenues increased from
41.4% to 42.9% and from 41.1% to 43.1% during the three and six months ended
June 30, 1997 as compared to the corresponding periods in 1996. The increases
were primarily due to increases in revenues as discussed above. EBITDA increased
from $685,900 to $763,000, or by 11.2%, and from $1,335,200 to $1,542,500, or by
15.5%, for the three and six months ended June 30, 1997 as compared to the
corresponding periods in 1996. EBITDA should be considered in addition to and
not as a substitute for net income and cash flows determined in accordance with
generally accepted accounting principles as an indicator of financial
performance and liquidity.
-12-
<PAGE> 13
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
RESULTS OF OPERATIONS (CONCLUDED)
Depreciation and amortization expense decreased from $708,200 to
$653,400, or by 7.7%, and from $1,412,800 to $1,317,100, or by 6.8%, for the
three and six months ended June 30, 1997 as compared to the corresponding
periods in 1996, due to the effect of certain intangible assets becoming fully
amortized.
The Joint Venture generated operating income of $109,600 and $225,400
for the three and six months ended June 30, 1997 as compared to an operating
loss of $22,300 and $77,600 for the corresponding periods in 1996. The three and
six months' increases were primarily due to increases in revenues and decreases
in depreciation and amortization expense.
Interest income remained relatively unchanged, decreasing from $18,800
to $18,700 for the three months, and increased from $32,800 to $45,800, or by
39.6%, for the six months ended June 30, 1997 as compared to the corresponding
periods in 1996. The increase for the six months was due to higher cash balances
available for investment and higher interest rates earned on invested cash.
Interest expense decreased from $180,300 to $122,300, or by 32.2%, and
from $362,600 to $268,700, or by 25.9%, for the three and six months ended June
30, 1997 as compared to the corresponding periods in 1996, primarily due to a
decrease in average borrowings.
Due to the factors described above, the Joint Venture generated net
income of $6,000 and $2,500 for the three and six months ended June 30, 1997 as
compared with a net loss of $183,800 and $407,400 for the corresponding periods
in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary objective, having invested its net offering
proceeds in the Joint Venture, is to distribute to its partners distributions of
cash flow received from the Joint Venture's operations and proceeds from the
sale of the Joint Venture's cable systems, if any, after providing for expenses,
debt service and capital requirements relating to the expansion, improvement and
upgrade of such cable systems. The Joint Venture relies upon the availability of
cash generated from operations and possible borrowings to fund its ongoing
expenses, debt service and capital requirements. In general, these requirements
involve expansion, improvement and upgrade of the Joint Venture's existing cable
television systems. The Joint Venture has budgeted capital expenditures of
approximately $688,700 in 1997, primarily for equipment upgrades. Capital
expenditures amounted to $358,600 during the first six months of 1997.
Management believes that cash generated by operations of the Joint
Venture, together with available cash and proceeds from borrowings, will be
adequate to fund capital expenditures, debt service and other liquidity
requirements in 1997. As a result, the Corporate General Partner intends to use
its cash for such purposes. Accordingly, management does not anticipate a
resumption of distributions to unitholders during 1997.
-13-
<PAGE> 14
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
In December 1993, the Joint Venture obtained a $9,000,000 reducing
revolving credit facility (the "Facility") maturing on September 30, 1999. The
Facility is secured by substantially all of the Joint Venture's assets. Interest
is payable at the Base Rate plus 1.50%. "Base Rate" means the higher of the
lender's prime rate or the Federal Funds effective rate plus 0.5%. The Facility
provides for quarterly reductions of the maximum commitment, which began on
September 30, 1994, and which are payable at the end of each fiscal quarter. The
Joint Venture is 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 Joint Venture is also required to pay a commitment fee of
0.5% per annum 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 Joint Venture believes that it was in compliance with its loan
covenants as of June 30, 1997. The Joint Venture's maximum commitment of
$6,850,000 at December 31, 1996 will decrease by $1,850,000 in 1997 to
$5,000,000, by $2,100,000 in 1998 to $2,900,000 and by $1,100,000 through June
30, 1999 with a final installment of $1,800,000 due on September 30, 1999. On
March 7, 1997, the Joint Venture elected to prepay $2,000,000 of its note
payable balance, which reduced its outstanding borrowings from $6,067,200 to
$4,067,200.
The Corporate General Partner has engaged in discussions with a number
of possible financing sources regarding the availability and terms of a
replacement bank facility for the Joint Venture. These discussions have to date
not been successful. The Corporate General Partner has generally been advised
that an individual facility of the size needed by the Joint Venture is too small
to interest most banks which lend to the cable television industry. Accordingly,
on June 6, 1997, the Corporate General Partner and an affiliated partnership
formed Enstar Finance Company, LLC ("EFC"). The Corporate General Partner's
objective is to have EFC obtain a secured bank facility of up to $35 million in
order to provide funds that would in turn be advanced to the Joint Venture and
certain of the other related partnerships managed by the Corporate General
Partner. Such funds would be used to repay existing bank obligations of such
partnerships and to provide capital to fund future rebuild and upgrade
requirements. Based on discussions with prospective lenders, the Corporate
General Partner believes that this structure, if implemented, will provide
capital to the Joint Venture on terms more favorable than could be obtained on a
"stand-alone" basis. Any advances by EFC will be independently collateralized by
the individual partnership borrowers so that no partnership will be required to
accept responsibility for borrowings made to other partnerships. The Corporate
General Partner has received a commitment letter from two agent banks regarding
the terms of a bank facility for EFC, although a definitive credit agreement has
not been executed as of the date of this Report. The Corporate General Partner
presently expects the EFC facility to be completed in the third quarter and,
accordingly, contemplates that a loan will be made by EFC to the Joint Venture
that will repay the existing Facility.
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Operating activities used $1,800 more cash during the six months ended
June 30, 1997 than in the corresponding period in 1996. The Partnership used
$6,200 more cash to pay liabilities owed to affiliates and third-party creditors
in the first six months of 1997 than in the comparable 1996 period due to
differences in the timing of payments. Changes in receivable balances provided
$3,100 less cash in the 1997
-14-
<PAGE> 15
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, L.P.
LIQUIDITY AND CAPITAL RESOURCES (CONCLUDED)
period due to differences in the timing of collections. Partnership expenses
used $7,500 less cash during the six months ended June 30, 1997 than in the
corresponding six months in 1996 after adding back non-cash equity in net loss
of Joint Venture and deducting non-cash equity in net income of Joint Venture.
Investing activities provided $400 more cash in the first six months of 1997 due
to increased distributions of cash flow from operations of the Joint Venture.
INFLATION
Certain of the Joint Venture's expenses, such as those for equipment
repair and replacement, 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.
-15-
<PAGE> 16
ENSTAR INCOME/GROWTH PROGRAM FIVE-B, 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.
<PAGE> 17
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/GROWTH PROGRAM FIVE-B, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: August 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 JUNE 30, 1997, AND THE STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,700
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,286,600
<CURRENT-LIABILITIES> 13,500
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,286,600
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 12,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,300
<INCOME-PRETAX> (12,300)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,300)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,300)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> 0
</TABLE>
