<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[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: 33-43948
TWI CABLE INC.
(Exact name of registrant as specified in its charter)
Delaware 59-1353813
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
75 Rockefeller Plaza, New York, NY 10019
(Address of principal executive offices) (ZIP code)
212-484-8000
(Registrant's Telephone number, including area code)
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 ________
----------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
110 shares of common stock, no par value per share, were issued and outstanding
as of August 13, 1997
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF TIME WARNER INC., MEETS THE
CONDITIONS SET FORTH IN GENERAL INSTRUCTION (H)(1)(a) AND (b) OF FORM 10-Q AND
IS FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
1
<PAGE>
TWI CABLE INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated balance sheet at June 30, 1997 and December 31, 1996................................... 3
Consolidated statement of operations for the three and six months ended
June 30, 1997 and 1996............................................................................ 4
Consolidated statement of cash flows for the six months ended
June 30, 1997 and 1996............................................................................ 5
Consolidated statement of shareholder's equity for the six months ended
June 30, 1997..................................................................................... 6
Notes to consolidated financial statements.......................................................... 7
Item 2. Management's Discussion and Analysis of Results of Operations................................. 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................................. 13
Item 6. Exhibits and Reports on Form 8-K.............................................................. 13
</TABLE>
2
<PAGE>
TWI CABLE INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ -------------
ASSETS (thousands, except per share amounts)
<S> <C> <C>
CURRENT ASSETS
Cash and equivalents............................................... $ 128,082 $ 114,546
Receivables, less allowances of $5.3 million and $4.7 million...... 47,881 42,493
Interest due from Time Warner...................................... 3,378 2,594
Prepaid expenses................................................... 4,499 4,773
------------ -------------
Total current assets............................................... 183,840 164,406
Income tax refunds due from Time Warner............................ 58,656 65,357
Investments and loans, including $24 million due from Time Warner.. 1,000,275 999,093
Property, plant and equipment, net................................. 882,281 821,665
Cable television franchises, net................................... 2,242,290 2,311,780
Goodwill and other intangibles, net................................ 955,069 980,913
Other assets....................................................... 6,304 13,176
------------ --------------
Total assets....................................................... $5,328,715 $5,356,390
============ ==============
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses.............................. $ 61,238 $ 88,571
Accrued interest expense........................................... 11,981 27,312
Subscriber advance payments and deposits........................... 23,728 18,532
Other current liabilities.......................................... 81,446 56,874
------------ --------------
Total current liabilities.......................................... 178,393 191,289
Long-term debt, including $304 million due to Time Warner at
December 31, 1996................................................. 3,210,000 3,474,145
Deferred income taxes.............................................. 1,042,880 1,060,763
Other liabilities.................................................. 14,204 17,899
SHAREHOLDER'S EQUITY
Common stock, no par value, 200 shares authorized, 110 shares and 100
issued and outstanding........................................... -- --
Paid-in capital.................................................... 1,808,676 1,509,081
Accumulated deficit................................................ (925,438) (896,787)
------------ --------------
Total shareholder's equity......................................... 883,238 612,294
------------ --------------
Total liabilities and shareholder's equity......................... $5,328,715 $5,356,390
============ ==============
</TABLE>
See accompanying notes.
3
<PAGE>
TWI CABLE INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------------
1997 1996 1997 1996
------ ------ ------ -----------
(thousands)
<S> <C> <C> <C> <C>
Revenues................................................... $248,732 $229,201 $490,362 $450,061
--------- --------- --------- -----------
Costs and expenses:
Operating and programming (a).............................. 90,008 81,547 178,823 161,230
Selling, general and administrative (a).................... 42,537 42,211 82,590 82,424
Depreciation and amortization.............................. 85,900 88,497 174,709 178,590
--------- --------- --------- -----------
Total costs and expenses................................. 218,445 212,255 436,122 422,244
--------- --------- --------- -----------
Operating income............................................ 30,287 16,946 54,240 27,817
Interest and other, net (b) (c)............................. (39,716) (59,311) (90,182) (108,034)
Gain on sale of investment.................................. 10,504 -- 21,240 --
--------- --------- --------- -----------
Income (loss) before income tax benefit..................... 1,075 (42,365) (14,702) (80,217)
Income tax (provision) benefit.............................. (4,077) 12,381 (1,380) 26,504
--------- --------- --------- -----------
Loss before extraordinary item.............................. (3,002) (29,984) (16,082) (53,713)
Extraordinary loss on retirement of debt (less
applicable income tax benefit of $8,449 and $6,493) -- -- (12,569) (9,658)
--------- --------- --------- -----------
Net loss.................................................... $ (3,002) $ (29,984) $ (28,651) $ (63,371)
========= ========= ========== ===========
(a) Includes expenses resulting from
transactions with affiliates
(Note 5).............................................. $ 24,834 $ 26,182 $ 54,268 $ 49,531
========= ========= ========= ===========
(b) Includes interest expense to affiliates
(Note 5)................................................ $ 99 $ 15,000 $ 5,010 $ 15,000
========= ========= ========= ===========
(c) Includes interest income from affiliates
(Note 5)................................................ $ 398 $ 384 $ 784 $ 776
========= ========= ========= ===========
</TABLE>
See accompanying notes.
4
<PAGE>
TWI CABLE INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------
1997 1996
--------- -----------
(thousands)
<S> <C> <C>
OPERATIONS
Net loss............................................ $ (28,651) $ (63,371)
Adjustments for noncash and nonoperating items:
Extraordinary loss on retirement of debt............ 12,569 9,658
Gain on sale of investments......................... (21,240) --
Depreciation and amortization....................... 174,709 178,590
Amortization of financing costs..................... 4,947 --
Equity in income of investees....................... (25,734) (21,190)
Deferred income tax benefit......................... (17,717) (17,237)
Changes in operating assets and liabilities......... (20,394) (134,625)
--------- -----------
Cash provided (used) by operations.................. 78,489 (48,175)
--------- -----------
INVESTING ACTIVITIES
Capital expenditures................................ (129,598) (70,611)
Investments and acquisitions, net of cash acquired.. (6,039) (188,532)
Cash acquired in TWI Cable Reorganization........... -- 109,318
Investment proceeds................................. 30,684 --
--------- -----------
Cash used by investing activities................... (104,953) (149,825)
--------- -----------
FINANCING ACTIVITIES
Borrowings.......................................... 380,000 1,551,275
Debt repayments..................................... (340,000) (1,237,784)
Distributions....................................... -- (764)
--------- -----------
Cash provided by financing activities............... 40,000 312,727
--------- -----------
INCREASE IN CASH AND EQUIVALENTS.................... 13,536 114,727
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD......... 114,546 7,649
--------- -----------
CASH AND EQUIVALENTS AT END OF PERIOD............... $ 128,082 $ 122,376
========= ===========
Supplemental disclosures of cash flow information:
Interest paid....................................... $ 126,785 $ 118,558
========= ===========
Income taxes paid................................... $ 3,948 $ 2,266
========= ===========
</TABLE>
See accompanying notes.
5
<PAGE>
TWI CABLE INC.
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Paid-In Accumulated
Capital Deficit Total
---------- ---------- ---------
(thousands)
<S> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996........................ $1,509,081 $(896,787) $612,294
Capital contributions............................... 299,595 -- 299,595
Net loss............................................ -- (28,651) (28,651)
---------- --------- --------
BALANCE AT JUNE 30, 1997............................ $1,808,676 $(925,438) $883,238
========== ========= ========
</TABLE>
See accompanying notes.
6
<PAGE>
TWI CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS
TWI Cable Inc. and subsidiaries (the "Company", formerly known as
Cablevision Industries Corporation and Subsidiaries ("CVI")) is a wholly owned
subsidiary of Time Warner Companies, Inc. ("Time Warner", formerly named Time
Warner Inc.). The Company owns and operates cable television systems located
throughout the United States.
On October 1, 1996, Time Warner completed a reorganization amongst certain
of its wholly owned cable subsidiaries (the "TWI Cable Reorganization") whereby
(a) Time Warner contributed to the Company all of the capital stock of each of
(i) TW/KBLCOM Inc. ("KBLCOM", formerly TWI Cable Inc.), a wholly owned
subsidiary of Time Warner owning and operating the net assets acquired in Time
Warner's 1995 acquisition of KBLCOM Incorporated and (ii) Summit Communications
Group, Inc. ("Summit", which was acquired by Time Warner in 1995) and (b) CVI
was renamed TWI Cable Inc. In connection with this reorganization, the Company
assumed (a) approximately $1.5 billion of KBLCOM's indebtedness under a five-
year revolving credit agreement (the "1995 Credit Agreement") which was assumed
in cancellation of the Company's $1.5 billion note payable to KBLCOM and (b)
$1.3 billion of indebtedness due to Time Warner. References herein to the
"Company" refer to CVI prior to October 1, 1996 and TWI Cable Inc. thereafter.
BASIS OF PRESENTATION
The TWI Cable Reorganization was accounted for as a merger of entities
under common control, similar to the pooling-of-interests method of accounting
for business combinations. Accordingly, the 1996 historical financial statements
of the Company have been restated to reflect the TWI Cable Reorganization
effective as of January 1, 1996.
The prior years' financial statements reflect the merger of the Company
with a wholly owned subsidiary of Time Warner (the "CVI Merger") and the
acquisition of the Gerry Companies, as more fully discussed in Note 2. The CVI
Merger did not result in a "pushdown" of Time Warner's accounting basis due to
the Company's public debt which remains outstanding (Note 4). Therefore, the
Company's accounting basis of net assets did not change as a result of the CVI
Merger.
The accompanying financial statements are unaudited, but in the opinion of
management, contain all adjustments (consisting of a normal recurring nature)
considered necessary to present fairly the financial position, results of
operations and cash flows for the periods presented in conformity with generally
accepted accounting principles applicable to interim periods. Certain
reclassifications have been made to the prior years' financial statements to
conform to the 1997 presentation. The accompanying financial statements should
be read in conjunction with the audited consolidated financial statements of the
Company for the year ended December 31, 1996.
7
<PAGE>
TWI CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
2. MERGERS AND ACQUISITIONS
On October 1, 1996, the TWI Cable Reorganization occurred (as more fully
described in Note 1), whereby Time Warner contributed the capital stock of
KBLCOM and Summit into the Company. In 1995 Time Warner acquired KBLCOM and
Summit on July 6 and May 2, respectively, by issuing an aggregate 2.6 million
shares of common stock and 14.3 million shares of two new series of convertible
preferred stock. KBLCOM owned cable television systems serving approximately
700,000 subscribers, in addition to a 50% ownership interest in Paragon
Communications which served an additional 972,000 subscribers. Summit owned
cable television systems serving approximately 162,000 subscribers.
Time Warner's acquisitions of KBLCOM and Summit were accounted for by the
purchase method of accounting for business combinations. Accordingly, Time
Warner's aggregate cost to acquire KBLCOM and Summit of approximately $1.384
billion was allocated to the net assets acquired in proportion to their
respective fair values as follows: investments - $950 million; cable television
franchises - $1.738 billion; goodwill - $732 million; other current and
noncurrent assets - $433 million; long-term debt - $1.353 billion; deferred
income tax liabilities - $1.061 billion; and other liabilities - $55 million.
On January 4, 1996, the Company merged with a wholly owned subsidiary of
Time Warner and became a direct, wholly owned subsidiary of Time Warner.
Immediately following the CVI Merger, the Company and certain of its
subsidiaries purchased the entire equity interests or all of the assets
(collectively, the "Gerry Acquisition") of Cablevision Industries Limited
Partnership and combined entities (collectively, the "Gerry Companies").
As a result of the Gerry Acquisition, the Company acquired cable television
systems serving approximately 247,000 subscribers in exchange for 2,467,294
shares of Time Warner common stock and the assumption or incurrence of
approximately $431 million of debt. The Company has accounted for the Gerry
Acquisition under the purchase method of accounting for business combinations
and has, accordingly, allocated the total acquisition cost of $304 million to
the underlying net assets in proportion to their respective fair values as
follows: cable television franchises - $459 million; goodwill - $33 million;
other current and noncurrent assets - $103 million; long-term debt - $220
million; deferred income taxes - $33 million; and other current liabilities -
$38 million.
The accompanying consolidated statement of operations includes the
operating results of the Gerry Companies from the closing date of the Gerry
Acquisition and the operating results of Summit and KBLCOM from January 1, 1996.
For the six months ended June 30, 1996, KBLCOM and Summit had revenues of $150
million and $36 million, respectively, and net (loss) income of $(36) million
and $1 million, respectively.
8
<PAGE>
TWI CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
3. INVESTMENTS
As a result of the TWI Cable Reorganization, the Company acquired a 50%
investment in Paragon Communications ("Paragon"), which is accounted for using
the equity method. The Company's allocable share of Paragon's income is
reflected in interest and other, net in the consolidated statement of
operations. At June 30, 1997, the Company's investment in Paragon exceeded its
pro rata share of the underlying net assets of Paragon by $575.3 million as a
result of the allocation of Time Warner's cost to acquire KBLCOM (Note 2). The
excess is being amortized using the straight-line method over 20 years.
Summarized financial information as reported by Paragon is set forth below (in
millions):
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------- ----------------
1997 1996 1997 1996
-------- -------- ------- -------
OPERATING STATEMENT INFORMATION
<S> <C> <C> <C> <C>
Revenues................... $ 106.5 $ 99.2 $ 209.4 $ 200.0
Operating income........... 25.2 19.0 48.5 43.6
Net income................. 29.1 19.4 52.1 44.2
</TABLE>
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- -------
<S> <C> <C>
BALANCE SHEET INFORMATION
Current assets............ $ 189.6 $ 155.6
Total assets.............. 860.0 809.0
Current liabilities....... 70.6 70.2
Total liabilities......... 76.8 78.0
</TABLE>
During the six months ended June 30, 1997, the Company liquidated certain
non-strategic investments for $30.7 million resulting in a pre-tax gain of $21.2
million.
4. LONG-TERM DEBT
The Company's long-term debt consists of:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ---------
(millions)
<S> <C> <C>
1995 Credit Agreement (6.44% and 6.50%)..... $2,870.0 $2,530.0
Time Warner demand loan (6.41%)............. -- 304.1
10.75% senior notes due January 30, 2002.... -- 300.0
10.5% senior debentures due April 15, 2005.. 140.0 140.0
9.25% senior debentures due April 1, 2008... 200.0 200.0
-------- --------
Total....................................... $3,210.0 $3,474.1
======== ========
</TABLE>
9
<PAGE>
TWI CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
On January 31, 1997, the Company borrowed $335.0 million under the 1995
Credit Agreement and used the proceeds to redeem all of the outstanding 10.75%
senior notes due January 30, 2002 (the "Senior Notes"), including redemption
premiums and accrued interest. In connection with this transaction, the Company
realized an extraordinary loss, net of applicable tax benefit, of approximately
$12.6 million on the early extinguishment of debt. An extraordinary loss, net of
applicable tax benefit, of approximately $9.7 million was recognized in 1996 in
connection with certain debt refinancings associated with the CVI Merger and the
Gerry Acquisition.
Effective April 1, 1997, approximately $300 million of the $309 million
Time arner demand loan was settled in a non-cash capital transaction including
the issuance of 10 shares of the Company's common stock to Time Warner. On April
28, 1997, the Company paid Time Warner the remaining loan balance of
approximately $9 million, including interest through such date, using funds
borrowed under the 1995 Credit Agreement.
On July 30, 1997, the Company offered to purchase for cash all of the
outstanding 10.5% Senior Debentures due April 15, 2005 (the "Debentures"). The
purchase price to be paid for each validly tendered Debenture in this offer will
be a redemption price of $1,026.20 per $1,000 principal amount of Debentures,
plus interest, discounted at the yield to maturity on the 6.375% U.S. Treasury
notes due April 30, 1999, plus a fixed spread of 37.5 basis points. The purchase
price is based on the redemption price on April 15, 1999, the first date the
debentures can be redeemed at the option of the Company, and includes a consent
fee of $5.00 per $1,000 principal amount of Debentures. The Debenture holders
will also be required to consent to amendments which will eliminate or modify
most of the restrictive covenants contained in the indenture governing the
Debentures. The tender offer and consent solicitation are conditioned on the
receipt of consents from the holders of a majority of the principal amount of
the Debentures. This offer will expire on August 26, 1997, unless extended by
the Company.
Interest expense totaled $121.5 million and $150.1 million for the six
months ended June 30, 1997 and 1996, respectively.
5. RELATED PARTIES
In the normal course of conducting business, the Company had various
transactions with Time Warner and its affiliates, generally on terms resulting
from a negotiation between the affected units that in management's view results
in reasonable allocations.
Included in the Company's operating expenses are charges for programming
and promotional services provided by Home Box Office, Turner Broadcasting
System, Inc. and other Time Warner affiliates. These charges totaled $37.5
million and $32.7 million for the six months ended June 30, 1997 and 1996,
respectively. These charges are based on customary rates and are in the ordinary
course of business. Accrued related party expenses for these programming and
promotional services are included in other current liabilities and amounted to
$11.0 million and $7.7 million as of June 30, 1997 and December 31, 1996,
respectively.
10
<PAGE>
TWI CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
The Company has entered into a management service arrangement with Time
Warner Entertainment Company, L.P. ("TWE"), pursuant to which TWE is responsible
for the management and operation of a majority of the Company's cable systems.
The management fees paid to TWE by the Company are based on an allocation of the
corporate expenses of TWE's cable division in proportion to the respective
number of subscribers of all cable systems managed by TWE's cable division. For
the six months ended June 30, 1997 and 1996, these fees totaled $16.8 and $16.8
million, respectively.
Interest expense on the demand loan payable to Time Warner (Note 4) for the
six months ended June 30, 1997 and 1996, totaled $5.0 million and $15.0 million,
respectively. Effective with the TWI Cable Reorganization, the Company assumed a
$24 million loan receivable from Time Warner. Interest income on this loan
totaled $784,000 and $776,000 for the six months ended June 30, 1997 and 1996,
respectively.
6. COMMITMENTS AND CONTINGENCIES
Pending legal proceedings are substantially limited to litigation
incidental to the business of the Company. In the opinion of management, the
ultimate resolution of these matters will not have a material effect on the
consolidated financial statements of the Company.
11
<PAGE>
TWI CABLE INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS
OVERVIEW
Operating results for the Company for the three and six months ended June
30, 1997 and 1996 are as follows (in millions):
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------ ----------------
1997 1996 1997 1996
---- ----- ---- ----
<S> <C> <C> <C> <C>
Revenues................................. $249 $ 229 $490 $450
Depreciation and amortization............ 86 88 175 179
Operating income......................... 30 17 54 28
Interest and other, net.................. (40) (59) (90) (108)
Loss before extraordinary item........... (3) (30) (16) (54)
Net loss................................. (3) (30) (29) (63)
</TABLE>
As discussed more fully below, the improvement in net loss for the three
and six months ended June 30, 1997, as compared to the same periods in 1996
principally resulted from (i) an increase in operating income primarily due to
increased revenues, (ii) pre-tax gains on the sale of non-strategic investments
of $11 million and $21 million for the three and six months ended June 30, 1997,
respectively and (iii) lower interest expense, partially offset by an increase
in income tax expense. In addition, the improvement in net loss for the six
months ended June 30, 1997, was mitigated by higher extraordinary losses on
retirement of debt.
Revenues benefited from an aggregate increase in basic cable subscribers,
increases in regulated cable rates phased in during January 1997 as permitted
under Time Warner Cable's "social contract" with the Federal Communications
Commission and increases in pay-per-view and advertising revenues. Operating
income increased as a result of the revenue growth, partially offset by higher
operating and programming expenses principally attributable to higher subscriber
levels and inflationary increases.
Interest and other, net benefited from interest savings achieved through
the retirement of the $300 million 10.75% senior notes on January 31, 1997 and
the conversion of $300 million from debt payable to Time Warner Companies Inc.
to equity on April 1, 1997.
The relationship between income (loss) before income taxes and income tax
(provision) benefit is principally affected by the amortization of goodwill and
certain other financial statement expenses that are not deductible for income
tax purposes.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Reference is made to the action commenced by the holders of Time Warner's
New York City cable franchises against the City of New York described on page 12
of the 1996 Form 10-K. On July 3, 1997, the United States Court of Appeals for
the Second Circuit affirmed the lower court's grant of a preliminary injunction
to the Time Warner plaintiffs. On July 22, 1997, the parties executed a
settlement agreement that resolved Time Warner's request for injunction relief.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
None.
(b) Reports on Form 8-K
-------------------
None.
13
<PAGE>
TWI CABLE INC.
SIGNATURE
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.
TWI CABLE INC.
(Registrant)
By: /S/ RICHARD M. PETTY
--------------------
Name: Richard M. Petty
Title Vice President and Controller
(Principal Accounting Officer)
Dated: August 13, 1997
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 0
<SECURITIES> 128,082
<RECEIVABLES> 53,175
<ALLOWANCES> 5,294
<INVENTORY> 0
<CURRENT-ASSETS> 183,840
<PP&E> 1,731,724
<DEPRECIATION> 849,443
<TOTAL-ASSETS> 5,323,714
<CURRENT-LIABILITIES> 173,392
<BONDS> 3,210,000
0
0
<COMMON> 0
<OTHER-SE> 883,238
<TOTAL-LIABILITY-AND-EQUITY> 5,323,714
<SALES> 490,362
<TOTAL-REVENUES> 490,362
<CGS> 178,823
<TOTAL-COSTS> 178,823
<OTHER-EXPENSES> 174,709<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120,702
<INCOME-PRETAX> (14,702)
<INCOME-TAX> 1,380
<INCOME-CONTINUING> (16,082)
<DISCONTINUED> 0
<EXTRAORDINARY> (12,569)
<CHANGES> 0
<NET-INCOME> (28,651)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>DEPRECIATION AND AMORTIZATION
</FN>
</TABLE>
