<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 0-15378
CABLE TV FUND 14-A, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-1024657
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
Address of principal executive office
(303) 792-3111
-----------------------------
Registrant's telephone number
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>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
- ------ ------------- -------------
<S> <C> <C>
CASH $ 8,106,490 $ 1,257,022
TRADE RECEIVABLES, less allowance for doubtful receivables
of $74,549 and $255,399 at June 30, 1997 and December 31, 1996,
respectively 608,052 1,142,329
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 81,661,103 137,237,866
Less- accumulated depreciation (46,530,801) (76,946,443)
------------ ------------
35,130,302 60,291,423
Franchise costs and other intangible assets, net of accumulated
amortization of $11,873,541 and $38,800,080 at June 30, 1997
and December 31, 1996, respectively 2,920,963 11,788,190
Investment in cable television joint venture 3,646,921 3,963,820
------------ ------------
Total investment in cable television properties 41,698,186 76,043,433
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,819,080 900,270
------------ ------------
Total assets $ 52,231,808 $ 79,343,054
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1997 1996
- ------------------------------------------- ------------- -------------
<S> <C> <C>
LIABILITIES:
Debt $ 18,386,781 $ 85,424,507
General Partner advances 334,918 352,232
Trade accounts payable and accrued liabilities 1,694,643 2,412,088
Subscriber prepayments 88,070 146,253
Accrued distributions to limited partners 9,547,500 -
------------ ------------
Total liabilities 30,051,912 88,335,080
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (43,546) (777,152)
------------ ------------
(42,546) (776,152)
------------ ------------
Limited Partners-
Net contributed capital (160,000 units outstanding at
June 30, 1997 and December 31, 1996) 68,722,000 68,722,000
Accumulated deficit (11,952,058) (76,937,874)
Distributions (34,547,500) -
------------ ------------
22,222,442 (8,215,874)
------------ ------------
Total liabilities and partners' capital (deficit) $ 52,231,808 $ 79,343,054
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
----------- ----------- ----------- -----------
REVENUES $ 7,422,692 $11,734,834 $15,193,103 $23,190,565
COSTS AND EXPENSES:
Operating expenses 5,553,318 6,593,511 10,078,806 13,546,441
Management fees and allocated
overhead from General Partner 747,994 1,360,323 1,663,779 2,712,099
Depreciation and amortization 3,080,949 3,563,169 5,903,129 7,232,921
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (1,959,569) 217,831 (2,452,611) (300,896)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (557,834) (1,605,558) (1,174,837) (3,066,439)
Gain on sale of cable television systems 7,050,021 - 69,973,972 -
Other, net 895,444 (57,930) (310,203) (63,744)
----------- ----------- ----------- -----------
Total other income (expense), net 7,387,631 (1,663,488) 68,488,932 (3,130,183)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE EQUITY IN
NET LOSS OF CABLE TELEVISION
JOINT VENTURE 5,428,062 (1,445,657) 66,036,321 (3,431,079)
EQUITY IN NET LOSS OF CABLE
TELEVISION JOINT VENTURE (155,767) (147,859) (316,899) (369,836)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 5,272,295 $(1,593,516) $65,719,422 $(3,800,915)
=========== =========== =========== ===========
ALLOCATION OF NET INCOME
(LOSS):
General Partner $ (17,778) $ (15,935) $ 733,606 $ (38,009)
=========== =========== =========== ===========
Limited Partners $ 5,290,073 $(1,577,581) $64,985,816 $(3,762,906)
=========== =========== =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $33.06 $(9.86) $406.16 $(23.52)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 160,000 160,000 160,000 160,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
-------------------------
<S> <C> <C>
1997 1996
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 65,719,422 $(3,800,915)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 5,903,129 7,232,921
Equity in net loss of cable television joint venture 316,899 369,836
Gain on sale of cable television systems (69,973,972) -
Increase (decrease) in General Partner advances (17,314) 1,369,071
Decrease in trade receivables 534,277 218,564
Increase in deposits, prepaid expenses and
deferred charges (1,463,760) (179,068)
Decrease in trade accounts payable, accrued liabilities
and subscriber prepayments (775,628) (368,365)
------------ -----------
Net cash provided by operating activities 243,053 4,842,044
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,246,139) (4,605,095)
Proceeds from sale of cable television systems, net of
brokerage fees 101,890,280 -
------------ -----------
Net cash provided by (used in) investing activities 98,644,141 (4,605,095)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 32,291,728 67,237
Repayment of debt (99,329,454) (286,289)
Increase in accrued distribution to limited partners 9,547,500 -
Distributions to limited partners (34,547,500) -
------------ -----------
Net cash used in financing activities (92,037,726) (219,052)
------------ -----------
Increase in cash 6,849,468 17,897
Cash, beginning of period 1,257,022 293,179
------------ -----------
Cash, end of period $ 8,106,490 $ 311,076
============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,234,566 $ 2,665,024
============ ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Cable TV Fund 14-A, Ltd. (the
"Partnership") at June 30, 1997 and December 31, 1996, its results of operations
for the three and six month periods ended June 30, 1997 and 1996 and its cash
flows for the six month periods ended June 30, 1997 and 1996. Results of
operations for these periods are not necessarily indicative of results to be
expected for the full year.
The Partnership owns and operates the cable television systems serving the
areas in and around Buffalo, Minnesota; Naperville, Illinois; and Calvert
County, Maryland. In addition, the Partnership owns a 27 percent interest in
Cable TV Fund 14-A/B Venture (the "Venture"). The Venture owns and operates the
cable television system serving certain areas in Broward County, Florida (the
"Broward County System"). As discussed below, the Partnership sold its cable
television systems in Turnersville, New Jersey (the "Turnersville System") on
January 10, 1997 and in Central Illinois (the "Central Illinois System") on June
30, 1997.
(2) On January 10, 1997, the Partnership sold the Turnersville System to an
unaffiliated party for a sales price of $84,500,000. The Partnership distributed
$25,000,000 (or approximately $313 per $1,000 invested in the Partnership) of
the sale proceeds to its limited partners, and repaid $57,387,500 of the balance
outstanding on its credit facility of which $52,500,000 was required to be
repaid under the terms of the Partnership's credit facility. Because the
$25,000,000 distribution to the limited partners did not return 125 percent of
the amount initially contributed by the limited partners, the General Partner
did not receive a distribution from the proceeds of the sale of the Turnersville
System. The Jones Group, Ltd., a subsidiary of the General Partner, received a
brokerage fee of $2,112,500, representing 2.5 percent of the sales price, for
acting as a broker in this transaction. Because the sale of the Turnersville
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners of the Partnership was required to
approve this sale.
On June 30, 1997, the Partnership sold the Central Illinois System to an
unaffiliated party for a sales price of $20,005,280, subject to customary
closing adjustments. As required under the terms of the Partnership's credit
facility, the Partnership repaid $9,800,000 of the balance outstanding on its
credit facility, and, in addition, paid a 2.5 percent brokerage fee of $502,500
to The Jones Group, Ltd. for acting as a broker in this transaction. The
Partnership distributed the balance of the sale proceeds of $9,547,500 (or
approximately $119 per $1,000 invested in the Partnership) to its limited
partners in July 1997. Because the limited partners have not yet received total
distributions equal to 125 percent of the capital initially contributed to the
Partnership by the limited partners, the General Partner did not receive a
distribution from the proceeds of the sale of the Central Illinois System.
Because the sale of the Central Illinois System did not represent a sale of all
or substantially all of the Partnership's assets, no vote of the limited
partners of the Partnership was required to approve this sale.
Taking into account the 1997 distributions made on the sale of the
Turnersville System and the Central Illinois System, the limited partners to
date have received a total of $432 for each $1,000 invested in the Partnership.
6
<PAGE>
The pro forma effect of the sales of the Turnersville System and the
Central Illinois System on the results of the Partnership's operations for the
six month periods ended June 30, 1997 and 1996, assuming the transactions had
occurred at the beginning of the year, is presented in the following unaudited
tabulation:
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1997
----------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
------------ ------------- -----------
<S> <C> <C> <C>
Revenues $15,193,103 $ (3,219,011) $11,974,092
=========== ============ ===========
Operating Loss $(2,452,611) $ 1,686,409 $ (766,202)
=========== ============ ===========
Net Income (Loss) $65,719,422 $(67,810,221) $(2,090,799)
=========== ============ ===========
For the Six Months Ended June 30, 1996
----------------------------------------
Pro Forma
As Reported Adjustments Pro Forma
----------- ------------- -----------
Revenues $23,190,565 $(11,081,845) $12,108,720
=========== ============ ===========
Operating Loss $ (300,896) $ 223,767 $ (77,129)
=========== ============ ===========
Net Loss $(3,800,915) $ 2,658,672 $(1,142,243)
=========== ============ ===========
</TABLE>
(3) Jones Intercable, Inc., a publicly held Colorado corporation, is the
"General Partner" and manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the three and six month periods ended June 30, 1997 (excluding the
Partnership's interest in the Venture) were $371,134 and $759,655, respectively,
compared to $586,742 and $1,159,528, respectively, for the similar 1996 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing services
and other corporate related facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor relations
services to the Partnership. Such services, and their related costs, are
necessary to the operation of the Partnership and would have been incurred by
the Partnership if it was a stand alone entity. Allocations of personnel costs
are based primarily on actual time spent by employees of the General Partner
with respect to each partnership managed. Remaining expenses are allocated
based on the pro rata relationship of the Partnership's total revenues of all
systems owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which Jones Intercable, Inc. is the general partner are also allocated a
proportionate share of these expenses. The General Partner believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Reimbursements made to the General Partner by the Partnership for
allocated overhead and administrative expenses for the three and six month
periods ended June 30, 1997 (excluding the Partnership's interest in the
Venture) were $376,860 and $904,124, respectively, compared to $773,581 and
$1,552,571, respectively, for the similar 1996 periods.
7
<PAGE>
(4) Financial information regarding the Venture is presented below:
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
-------------- ------------------
<S> <C> <C>
ASSETS
------
Cash and accounts receivable $ 1,750,933 $ 1,368,882
Investment in cable television properties 54,170,740 56,526,226
Other assets 652,291 381,950
------------ ------------
Total assets $ 56,573,964 $ 58,277,058
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 40,793,563 $ 41,262,561
Payables and accrued liabilities 1,967,929 2,032,654
Partners' contributed capital 70,000,000 70,000,000
Accumulated deficit (56,187,528) (55,018,157)
------------ ------------
Total liabilities and partners' capital $ 56,573,964 $ 58,277,058
============ ============
</TABLE>
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---------- ---------- ----------- -----------
Revenues $6,934,990 $6,272,821 $13,779,095 $12,533,786
Operating expenses 3,877,200 3,398,184 7,710,954 6,913,900
Management fees and allocated overhead
from General Partner 720,372 732,724 1,534,004 1,468,568
Depreciation and amortization 2,182,538 2,059,297 4,304,255 4,120,678
---------- ---------- ----------- -----------
Operating income 154,880 82,616 229,882 30,640
Interest expense (719,372) (690,065) (1,423,029) (1,491,756)
Other, net (10,295) 61,917 23,776 96,407
---------- ---------- ----------- ------------
Net loss $ (574,787) $ (545,532) $(1,169,371) $(1,364,709)
========== ========== =========== ============
</TABLE>
Management fees paid to the General Partner by the Venture totaled
$346,750 and $688,955, respectively, for the three and six month periods ended
June 30, 1997, compared to $313,641 and $626,689, respectively, for the similar
1996 periods. Reimbursements for overhead and administrative expenses paid to
the General Partner by the Venture totaled $373,622 and $845,049, respectively,
for the three and six month periods ended June 30, 1997, compared to $419,083
and $841,879 for the similar 1996 periods. Management fees paid by the Venture
and attributable to the Partnership totaled $93,969 and $186,706, respectively,
for the three and six months ended June 30, 1997, compared to $84,997 and
8
<PAGE>
$169,832, respectively, for the similar 1996 periods. Reimbursements paid by
the Venture and attributable to the Partnership totaled $101,251 and $229,000,
respectively, for the three and six months ended June 30, 1997, compared to
$113,571 and $228,149, respectively, for the similar 1996 periods.
9
<PAGE>
CABLE TV FUND 14-A, LTD.
------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
It is the General Partner's publicly announced policy that it intends to
liquidate its managed partnerships, including the Partnership, as opportunities
for sales of partnership cable television systems arise in the marketplace over
the next several years. In accordance with the General Partner's policy, the
Turnersville System and the Central Illinois System have been sold; and the
Naperville System and the Broward County System are being marketed for sale.
There is no assurance as to the timing or terms of any sales.
The Partnership-
On January 10, 1997, the Partnership sold the Turnersville System to an
unaffiliated party for a sales price of $84,500,000. The Partnership
distributed $25,000,000 (or approximately $313 per $1,000 invested in the
Partnership) of the sale proceeds to its limited partners, and repaid
$57,387,500 of the balance outstanding on its credit facility of which
$52,500,000 was required to be repaid under the terms of the Partnership's
credit facility. Because the $25,000,000 distribution to the limited partners
did not return 125 percent of the amount initially contributed by the limited
partners, the General Partner did not receive a distribution from the proceeds
of the sale of the Turnersville System. The Jones Group, Ltd., a subsidiary of
the General Partner, received a brokerage fee of $2,112,500, representing 2.5
percent of the sales price, for acting as a broker in this transaction. Because
the sale of the Turnersville System did not represent a sale of all or
substantially all of the Partnership's assets, no vote of the limited partners
of the Partnership was required to approve this sale.
On June 30, 1997, the Partnership sold the Central Illinois System to an
unaffiliated party for a sales price of $20,005,280, subject to customary
closing adjustments. As required under the terms of the Partnership's credit
facility, the Partnership repaid $9,800,000 of the balance outstanding on its
credit facility, and, in addition, paid a 2.5 percent brokerage fee of $502,500
to The Jones Group, Ltd. for acting as a broker in this transaction. The
Partnership distributed the balance of the sale proceeds of $9,547,500 (or
approximately $119 per $1,000 invested in the Partnership) to its limited
partners in July 1997. Because the limited partners have not yet received total
distributions equal to 125 percent of the capital initially contributed to the
Partnership by the limited partners, the General Partner did not receive a
distribution from the proceeds of the sale of the Central Illinois System.
Because the sale of the Central Illinois System did not represent a sale of all
or substantially all of the Partnership's assets, no vote of the limited
partners of the Partnership was required to approve this sale.
For the six months ended June 30, 1997, the Partnership generated net cash
from operating activities totaling $243,053, which is available to fund capital
expenditures and non-operating costs. Capital expenditures totaled
approximately $3,232,000 during the first six months of 1997. Approximately 50
percent of the expenditures related to construction of service drops to
subscriber's homes. Approximately 36 percent of the expenditures related to new
plant construction in all of the Partnership's systems. The remainder of the
expenditures was for various enhancements in all of the Partnership's systems.
These expenditures were funded by cash generated from operations and borrowings
under the Partnership's credit facility. Budgeted capital expenditures for the
remainder of 1997 are approximately $3,911,000. Approximately 37 percent of the
expenditures will be used for new plant construction in all of the Partnership's
systems. Approximately 31 percent will relate to construction of service drops
to subscribers' homes. The remainder of the anticipated expenditures is for
various enhancements in all of the Partnership's systems. These capital
expenditures are necessary to maintain the value of the Partnership's remaining
systems. Funding for the improvements is expected to come from cash on hand,
cash generated from operations and, if necessary, borrowings under its new
credit facility.
Ameritech, which provides telephone service in a multi-state region
including Illinois, has begun providing cable television service in Naperville,
Illinois, a community currently served by the Naperville System. This
competition is having a negative effect on the Naperville System's revenues,
cash flow and fair market value. It could also have a negative impact on the
Partnership's ability to sell the Naperville System and on the terms of the
renewal of the franchise. The General Partner is taking prudent steps necessary
to meet this competition from Ameritech and, to the extent possible,
10
<PAGE>
to safeguard the value of the Naperville System. These steps include a judicial
challenge to the terms on which the franchise was issued to Ameritech.
Litigation is currently pending in federal court against both the City of
Naperville and Ameritech and includes claims by the City of Naperville against
the Partnership.
In March 1997, the Partnership entered into a new $37,500,000 revolving
credit facility. The Partnership borrowed $32,300,000 under the revolving
credit facility to repay the outstanding balance on its previous credit
facility. Upon the sale of the Central Illinois System on June 30, 1997 and as
required by the terms of the revolving credit facility, the Partnership repaid
$9,800,000 of the then-outstanding balance, and the commitment amount was
reduced to $27,700,000, of which $18,000,000 was outstanding at June 30, 1997,
leaving $9,700,000 available for future borrowings. The revolving credit
facility expires on September 30, 2000, at which time the then-outstanding
balance is payable in full. Interest on the revolving credit facility's
outstanding balance is at the Partnership's option of the London Interbank
Offered Rate ("LIBOR") plus .875 percent to 1.375 percent, the Certificate of
Deposit Rate (the "CD Rate") plus 1.0 percent to 1.5 percent or the Base Rate
plus 0 percent to .375 percent. The effective interest rates on amounts
outstanding as of June 30, 1997 and 1996 were 7.14 percent and 6.74 percent,
respectively.
The General Partner believes that the Partnership has sufficient sources
of capital available from cash on hand, cash generated from operations and
borrowings available under its revolving credit facility to meet its anticipated
needs.
The Venture-
In addition to those systems owned directly by it, the Partnership owns a
27 percent interest in the Venture. The Partnership's investment in the
Venture, accounted for under the equity method, decreased by $316,899 compared
to the December 31, 1996 balance. This decrease represents the Partnership's
proportionate share of losses generated by the Venture during the six months
ended June 30, 1997.
For the six months ended June 30, 1997, the Venture generated net cash from
operating activities totaling $2,195,800, which is available to fund capital
expenditures and non-operating costs. During the first six months of 1997,
capital expenditures in the Venture-owned Broward County System totaled
approximately $1,812,000. Approximately 44 percent of these expenditures
related to service drops to homes. Approximately 37 percent of these
expenditures related to new plant construction. The remainder of the
expenditures was for various enhancements in the Broward County System. Such
expenditures were funded primarily from cash on hand and cash generated from
operations. Anticipated capital expenditures for the remainder of 1997 are
approximately $2,072,000. Approximately 41 percent will relate to service drops
to homes. Approximately 39 percent will relate to new plant construction. The
remainder of the anticipated expenditures is for various enhancements in the
Broward County System. These capital expenditures are necessary to maintain the
value of the Broward County System. These capital expenditures are expected to
be funded from cash on hand, cash generated from operations and, if necessary,
borrowings under the Venture's credit facility.
The Venture has a reducing revolving credit facility with an available
commitment of $42,500,000. The entire $42,500,000 commitment is available
through December 31, 1998, at which time the commitment will begin to reduce
quarterly until December 31, 2003 when the amount available will be zero. At
June 30, 1997, the balance outstanding was $40,603,000, leaving $1,897,000
available for future borrowings. Interest is at the Venture's option of the
Prime Rate plus 1/4 percent, LIBOR plus 1-1/4 percent or the CD Rate plus 1-3/8
percent. The effective interest rates on amounts outstanding as of June 30,
1997 and 1996 were 7.06 percent and 6.74 percent, respectively.
The General Partner believes that the Venture has sufficient sources of
capital from cash on hand, cash generated from operations and borrowings
available under its credit facility to service its current needs.
RESULTS OF OPERATIONS
- ---------------------
The Partnership-
Revenues of the Partnership decreased $4,312,142, or approximately 37
percent, to $7,422,692 for the three month period ended June 30, 1997 compared
to $11,734,834 for the comparable 1996 period. Revenues decreased $7,997,462,
or approximately 34 percent, to $15,193,103 for the six months ended June 30,
1997 compared to $23,190,565 for the comparable 1996 period. These decreases
were primarily a result of the sale of the Turnersville System on January 10,
1997. Disregarding the effect of the sale of the Turnersville System, revenues
would have increased $4,234, or less than 1 percent, to $7,422,692 for the three
months ended June 30, 1997 from $7,418,458 for the
11
<PAGE>
comparable 1996 period. Revenues would have increased $44,149, or approximately
1 percent, to $14,735,254 for the six months ended June 30, 1997 from
$14,691,105 for the comparable 1996 period. Basic service rate increases
accounted for approximately 88 percent and 81 percent, respectively, of the
increases in revenues for the three and six month periods ended June 30, 1997.
The increases in revenues would have been greater but for the Naperville
System's loss of subscribers due to competition from Ameritech.
Operating expenses consist primarily of costs associated with the operation
and administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.
Operating expenses decreased $1,040,193, or approximately 16 percent, to
$5,553,318 for the three month period ended June 30, 1997 compared to $6,593,511
for the comparable 1996 period. Operating expenses decreased $3,467,635, or
approximately 26 percent, to $10,078,806 for the six months ended June 30, 1997
compared to $13,546,441 for the comparable 1996 period. These decreases were
primarily a result of the sale of the Turnersville System. Disregarding the
effect of the Turnersville System sale, operating expenses would have increased
$159,499, or approximately 4 percent, to $4,486,695 for the three months ended
June 30, 1997 from $4,327,196 for the comparable period. This increase was a
result of increases in programming expenses. Operating expenses would have
decreased $32,294, or less than 1 percent, to $8,880,814 for the six months
ended June 30, 1997 from $8,913,108 for the comparable 1996 period. This
decrease was due to a decrease in subscriber related expenses as a result of the
Naperville System's loss of subscribers due to competition from Ameritech.
Operating expenses represented 60 percent of revenues for each of the three and
six month periods ended June 30, 1997 compared to 58 percent and 61 percent,
respectively, for the comparable 1996 periods.
Management fees and allocated overhead from the General Partner decreased
$612,329, or approximately 45 percent, to $747,994 for the three month period
ended June 30, 1997 compared to $1,360,323 for the comparable 1996 period.
Management fees and allocated overhead from the General Partner decreased
$1,048,320, or approximately 39 percent, to $1,663,779 for the six month period
ended June 30, 1997 compared to $2,712,099 for the comparable 1996 period.
These decreases were primarily a result of the sale of the Turnersville System.
Disregarding the effect of the Turnersville System sale, management fees and
allocated overhead from the General Partner would have decreased $123,388, or
approximately 14 percent, to $747,729 for the three month period ended June 30,
1997 from $871,067 for the comparable 1996 period. Management fees and
allocated overhead from the General Partner would have decreased $117,487, or
approximately 7 percent, to $1,616,974 for the six months ended June 30, 1997
from $1,734,461 for the comparable 1996 period. These decreases were primarily
due to a reduction in allocated expenses from the General Partner.
Depreciation and amortization expense decreased $482,220, or approximately
14 percent, to $3,080,949 for the three month period ended June 30, 1997
compared to $3,563,169 for the comparable 1996 period. Depreciation and
amortization expense decreased $1,329,792, or approximately 18 percent, to
$5,903,129 for the six months ended June 30, 1997 compared to $7,232,921 for the
comparable 1996 period. These decreases were a result of the sale of the
Turnersville System. Disregarding the effect of the Turnersville System sale,
depreciation and amortization expense would have increased $414,328, or
approximately 16 percent, to $3,080,949 for the three months ended June 30, 1997
from $2,666,621 for the comparable 1996 period. Depreciation and amortization
expense would have increased $362,715, or approximately 7 percent, to $5,802,642
for the six months ended June 30, 1997 from $5,439,927 for the comparable 1996
period. These increases were a result of capital additions during 1997.
The Partnership recognized an operating loss of $1,959,569 for the three
month period ended June 30, 1997 compared to operating income of $217,831 for
the comparable 1996 period. Operating loss increased $2,151,715 to $2,452,611
for the six month period ended June 30, 1997 compared to $300,896 for the
comparable 1996 period. Disregarding the effect of the Turnersville System
sale, operating loss increased $446,255, to $892,681 for the three month period
ended June 30, 1997, from $446,426 for the comparable 1996 period. This
increase was a result of the increase in operating expenses and depreciation and
amortization expense exceeding the increase in revenues and decrease in
management fees and allocated overhead from the General Partner. Operating loss
increased $168,785, or approximately 12 percent, to $1,565,176 for the six
months ended June 30, 1997 from $1,396,391 for the comparable 1996 period. This
increase was a result of the increase in depreciation and amortization expense
exceeding the increase in revenues and decreases in operating expenses and
management fees and allocated overhead from the General Partner.
12
<PAGE>
Interest expense decreased $1,047,724, or approximately 65 percent, to
$557,834 for the three month period ended June 30, 1997 compared to $1,605,558
for the comparable 1996 period. Interest expense decreased $1,891,602, or
approximately 62 percent, to $1,174,837 for the six months ended June 30, 1997
compared to $3,066,439 for the comparable 1996 period. These decreases were
primarily due to lower outstanding balances on interest bearing obligations
during 1997. A portion of the proceeds from the sale of the Turnersville System
was used to reduce the Partnership's debt.
The Partnership recognized a gain on the sale of the Turnersville System of
$62,923,951 and a gain on the sale of the Central Illinois System of $7,050,021
during the six month period ended June 30, 1997. No similar gains were
recognized during the comparable 1996 period.
The Partnership reported income before equity in net loss of cable
television joint venture of $5,428,062 at June 30, 1997 compared to a loss
before equity in net loss of cable television joint venture of $1,445,657 for
the comparable 1996 period. Income before equity in net loss of cable
television joint venture totaled $66,036,322 for the six month period ended June
30, 1997 compared to a loss before equity in net loss of cable television joint
venture of $3,431,079 for the comparable 1996 period. These changes were
primarily a result of the gain on the sale of the Turnersville System.
The Venture-
Revenues of the Venture's Broward County System increased $662,169, or
approximately 11 percent, to $6,934,990 for the three months ended June 30, 1997
from $6,272,821 for the three months ended June 30, 1996. Revenues increased
$1,245,309, or approximately 10 percent, to $13,779,095 for the six months ended
June 30, 1997 from $12,533,786 for the comparable 1996 period. These increases
in revenues were due to basic service rate increases, increases in advertising
sales and an increase in the number of basic subscribers. Basic service rate
increases accounted for approximately 40 percent and 35 percent, respectively,
of the increases in revenues for the three and six month periods ended June 30,
1997. An increase in advertising sales accounted for approximately 14 percent
and 20 percent, respectively, of the increases in revenues for the three and six
month periods ended June 30, 1997. The number of basic subscribers increased
810, or approximately 2 percent, to 49,927 at June 30, 1997 from 49,117 at June
30, 1996. The increase in the number of basic subscribers accounted for
approximately 7 percent and 10 percent, respectively, of the increases in
revenues for the three and six month periods ended June 30, 1997. No other
individual factor was significant to these increases in revenues.
Operating expenses increased $479,016, or approximately 14 percent, to
$3,877,200 for the three months ended June 30, 1997 from $3,398,184 for the
comparable 1996 period. For the six month periods ended June 30, 1997 and 1996,
operating expenses increased $797,054, or approximately 12 percent, to
$7,710,954 at June 30, 1997 from $6,913,900 at June 30, 1996. Operating
expenses represented 56 percent of revenues for both the three and six month
periods ended June 30, 1997 compared to 54 percent and 55 percent, respectively,
of revenues for the three and six months ended June 30, 1996. These increases
in operating expenses were primarily due to increases in programming fees. No
other individual factor was significant to these increases in operating
expenses.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard. Operating cash flow increased
$183,153, or approximately 6 percent, to $3,057,790 for the three months ended
June 30, 1997 from $2,874,637 for the comparable 1996 period. For the six month
periods ended June 30, 1997 and 1996, operating cash flow increased $448,255, or
approximately 8 percent, to $6,068,141 at June 30, 1997 from $5,619,886 at June
30, 1996. These increases were due to the increases in revenues exceeding the
increases in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$12,352, or approximately 2 percent, to $720,372 for the three months ended June
30, 1997 from $732,724 for the comparable 1996 period. This decrease was
primarily due to a reduction in allocated expenses from the General Partner.
For the six month periods ended June 30, 1997 and 1996, management fees and
allocated overhead from the General Partner increased $65,436, or approximately
4 percent, to $1,534,004 at June 30, 1997 from $1,468,568 at June 30, 1996.
This increase was due to the increase in revenues, upon which such management
fees are based. This increase was partially offset by a decrease in expenses
allocated from Jones Intercable, Inc.
13
<PAGE>
Depreciation and amortization expense increased $123,241, or approximately
6 percent, to $2,182,538 for the three months ended June 30, 1997 from
$2,059,297 for the comparable 1996 period. For the six month periods ended June
30, 1997 and 1996, depreciation and amortization expense increased $183,577, or
approximately 4 percent, to $4,304,255 at June 30, 1997 from $4,120,678 at June
30, 1996. These increases were due to capital additions during 1997.
Operating income increased $72,264, or approximately 87 percent, to
$154,880 for the three months ended June 30, 1997 from $82,616 for the
comparable 1996 period. This increase was due to the increase in revenues and
the decrease in management fees and allocated overhead from the General Partner
exceeding the increases in operating expenses and depreciation and amortization
expense. For the six month periods ended June 30, 1997 and 1996, operating
income increased $199,242 to $229,882 at June 30, 1997 from $30,640 at June 30,
1996. This increase was due to the increase in revenues exceeding the increases
in operating expenses, management fees and allocated overhead from the General
Partner and depreciation and amortization expense.
Interest expense increased $29,307, or approximately 4 percent, to $719,372
for the three months ended June 30, 1997 from $690,065 for the comparable 1996
period. This increase was primarily due to higher outstanding balances on
interest bearing obligations during the second quarter of 1997. For the six
month periods ended June 30, 1997 and 1996 interest expense decreased $68,727,
or approximately 5 percent, to $1,423,029 at June 30, 1997 from $1,491,756 at
June 30, 1996. This decrease was primarily due to lower outstanding balances on
interest bearing obligations.
Net loss of the Venture increased $29,255, or approximately 5 percent, to
$574,787 for the three months ended June 30, 1997 from $545,532 for the
comparable 1996 period. For the six month periods ended June 30, 1997 and 1996,
net loss decreased $195,338, or approximately 14 percent, to $1,169,371 at June
30, 1997 from $1,364,709 at June 30, 1996. These losses are the result of the
factors discussed above.
14
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
Report on Form 8-K dated June 30, 1997, reported that on June 30,
1997 Cable TV Fund 14-A, Ltd. sold the Central Illinois System to an
unaffiliated party for a sales price totaling approximately $20,100,000,
subject to closing adjustments.
15
<PAGE>
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.
CABLE TV FUND 14-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
---------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 13, 1997
16
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 8,106,490
<SECURITIES> 0
<RECEIVABLES> 682,601
<ALLOWANCES> 74,549
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 81,661,103
<DEPRECIATION> (46,530,801)
<TOTAL-ASSETS> 52,231,808
<CURRENT-LIABILITIES> 12,051,912
<BONDS> 18,000,000
0
0
<COMMON> 0
<OTHER-SE> 22,179,896
<TOTAL-LIABILITY-AND-EQUITY> 52,231,808
<SALES> 0
<TOTAL-REVENUES> 15,193,103
<CGS> 0
<TOTAL-COSTS> 17,645,714
<OTHER-EXPENSES> (69,663,769)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,174,837
<INCOME-PRETAX> 65,719,422
<INCOME-TAX> 0
<INCOME-CONTINUING> 65,719,422
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,719,422
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