SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30,1995
0-16690
(Commission File Number)
ML MEDIA OPPORTUNITY PARTNERS, L.P.
(Exact name of registrant as specified in its governing
instruments)
Delaware
(State or other jurisdiction of organization)
13-3429969
(IRS Employer Identification No.)
World Financial Center
South Tower - 14th Floor
New York, New York 10080-6114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 236-6472
N/A
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 .
ML Media Opportunity Partners, L.P.
Part I - Financial Information.
Item 1. Financial Statements.
TABLE OF CONTENTS
Consolidated Balance Sheets as of September 30,
1995 (Unaudited) and December 31, 1994 (Unaudited)
Consolidated Statements of Operations for the
thirteen and thirty-nine week periods ended
September 30, 1995 (Unaudited) and September 30,
1994 (Unaudited)
Consolidated Statements of Cash Flows for the
thirty-nine week periods ended September 30, 1995
(Unaudited) and September 30, 1994 (Unaudited)
Notes to the Consolidated Financial Statements for
the thirty-nine week period ended September 30,
1995 (Unaudited)
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1995
(UNAUDITED) AND DECEMBER 31, 1994 (UNAUDITED)
September 30, December 31,
Notes 1995 1994
<S> <C> <C> <C>
ASSETS:
Cash and cash
equivalents 2 $ 1,165,154 $ 2,150,473
Investment in joint
venture and common
stock 2 1,261,666 1,261,666
Other assets 82,932 537,901
TOTAL ASSETS $ 2,509,752 $ 3,950,040
LIABILITIES AND
PARTNERS' DEFICIT:
Liabilities:
Accounts payable and
accrued liabilities $ 605,554 $ 688,288
Net Liabilities of
Discontinued
Operations: 2,3
Production Segment 140,711 140,711
Television and Radio
Station Segment - 6,137,046
Total Liabilities 746,265 6,966,045
Commitments and
Contingencies 2,3
(Continued on the following page.)
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 1995 (UNAUDITED)
AND DECEMBER 31, 1994 (UNAUDITED)
(continued)
September 30, December 31,
Notes 1995 1994
<S> <C> <C> <C>
Partners'
Capital/(Deficit):
General Partners:
Capital contributions,
net of offering
expenses 1 1,019,428 1,019,428
Cash distributions (120,077) (90,624)
Cumulative loss (861,224) (938,472)
38,127 (9,668)
Limited Partners:
Capital contributions,
net of offering
expenses (112,147.1
Units of Limited
Partnership Interest) 1 100,914,316 100,914,316
Tax allowance cash
distributions (2,040,121) (2,040,121)
Other cash distributions
(11,887,582) (8,971,760)
Cumulative loss (85,261,253) (92,908,772)
1,725,360 (3,006,337)
Total Partners'
Capital/(Deficit) 1,763,487 (3,016,005)
TOTAL LIABILITIES AND
PARTNERS'
CAPITAL/(DEFICIT) $ 2,509,752 $ 3,950,040
See Notes to Consolidated Financial Statements (Unaudited).
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
Thirteen Weeks Thirty-Nine Weeks
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Not 1995 1994 1995 1994
es
<S> <C> <C> <C> <C> <C>
Partnership
Operating
Expenses:
General and
administra-
tive $ 28,395 $ 123,742 $ 177,05 $ 196,475
7
Amortization - 74,487 - 223,465
Management
fees 589,386 786,155 1,794,680 2,361,408
617,781 984,384 1,971,737 2,781,348
Other income - - 128,212 -
Interest
income 16,317 301,292 97,233 349,747
16,317 301,292 225,445 349,747
Loss from
Partnership
operations (601,464) (683,092) (1,746,292 (2,431,601
) )
(Continued on the following page.)
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
Thirteen Weeks Thirty-Nine Weeks
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Not 1995 1994 1995 1994
es
<S> <C <C> <C> <C> <C>
>
Discon-
tinued
opera-
tions:
Income/(L
oss)
from
discon-
tinued
opera-
tions
of: 2,3
Cable
Televi-
sion
Systems
Segment - - - (6,784,982)
Productio
n
Segment - (36,170) - (46,475)
Televi-
sion and
Radio
Station
Segment
- (1,036,216) - (3,054,155)
(Continued on the following page.)
</TABLE>
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
Thirteen Weeks Thirty-Nine Weeks
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Not 1995 1994 1995 1994
es
<S> <C <C> <C> <C> <C>
>
Gain on
Sale of
Discon-
tinued
Cable
Televi-sion
Systems
Segment
- 600,000 - 600,000
Gain on
Sale of
Discon-
tinued
Televi-sion
and Radio
Station
Segment
7,786,731 - 9,471,059 -
7,786,731 (472,386 9,471,059 (9,285,612)
)
NET INCOME/
(LOSS)
BEFORE
EXTRA-
ORDINARY
ITEM
7,185,267 (1,155,478) 7,724,767 (11,717,213)
EXTRA-
ORDINARY
ITEM - 130,330,596 - 130,330,596
NET INCOME $ 7,185,267 $129,175,118 $ 7,724,76 $118,613,38
7 3
(Continued on the following page.)
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
Thirteen Weeks Thirty-Nine Weeks
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Not 1995 1994 1995 1994
es
<S> <C <C> <C> <C> <C>
>
Per Unit
of
Limited
Partner-
ship
Inter-
est:
Loss from
Partner-
ship
opera-
tions $ (5.31) $ (6.03) $ (15.42) $ (21.47)
Income/-
(Loss)
from
discon-
tinued
opera-
tions 68.74 (4.17) 83.61 (81.97)
EXTRAOR-
DINARY
ITEM - 1,150.52 - 1,150.52
NET
INCOME $ 63.43 $ 1,140.32 $ 68.19 $ 1,047.08
Number of
Units 112,147.1 112,147.1 112,147.1 112,147.1
See Notes to Consolidated Financial Statements (Unaudited).
</TABLE>
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
September September 30,
Notes 30, 1994
1995
<S> <C> <C> <C>
Cash flows from
operating activities:
Net Income $ 7,724,767 $ 118,613,383
Adjustments to reconcile
net income to net cash
used in operating
activities:
Amortization - 223,465
Gain on disposition of
Maryland Cable - (130,330,596)
Gain on sale of Windsor - (600,000)
Gain on sale of
Television and Radio
Station Segment (9,471,059) -
(Continued on the following page.)
</TABLE>
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
September September
Notes 30, 30,
1995 1994
<S> <C> <C> <C>
Change in operating
assets and liabilities:
Decrease in other assets 454,969 34,106
(Decrease)/Increase in
accounts payable and
accrued liabilities (82,734) 58,571
Change in Net
Liabilities of
Discontinued
Operations:
Cable Television
Systems Segment - 6,784,982
Television and Radio
Station Segment - 3,641,132
Production Segment - 46,475
Net cash used in
operating activities (1,374,057 (1,528,482)
)
(Continued on the following page.)
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ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
September September
Notes 30, 30,
1995 1994
<S> <C> <C> <C>
Cash flows from
investing activities:
Purchase of property,
plant and equipment - (655,150)
Proceeds from sale of
radio station WMXN-FM 3,334,01 -
3
Proceeds from
disposition of
Maryland Cable - 9,231,536
Net cash provided by
investing activities 3,334,013 8,576,386
Cash flows from
financing activities:
Cash Distribution (2,945,27 -
5)
Net Cash used in
financing activities (2,945,275 -
)
(Continued on the following page.)
</TABLE>
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<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED
SEPTEMBER 30, 1995 (UNAUDITED)
AND SEPTEMBER 30, 1994 (UNAUDITED)
(Continued)
September 30, September 30,
Notes 1995 1994
<S> <C> <C> <C>
Net (decrease)/increase
in cash and cash
equivalents (985,319) 7,047,904
Cash and cash
equivalents at
beginning of year 2,150,473 3,739,678
Cash and cash
equivalents at end of
period $ 1,165,154 $ 10,787,582
Supplemental Disclosure:
Effective February 21, 1995, the Partnership sold the assets of
radio station WMXN-FM.
Effective September 15, 1995, the Partnership sold all of the
capital stock of Avant Development Corporation.
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
ML MEDIA OPPORTUNITY PARTNERS, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTY-NINE WEEK PERIOD ENDED SEPTEMBER 30, 1995
(UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ML Media Opportunity Partners, L.P. (the "Partnership") was
formed and the Certificate of Limited Partnership was filed under
the Delaware Revised Uniform Limited Partnership Act on June 23,
1987. Operations commenced on March 23, 1988 with the first
closing of the sale of units of limited partnership interest.
Media Opportunity Management Partners (the "General Partner") is
a joint venture, organized as a general partnership under New
York law, between RP Opportunity Management, L.P., a limited
partnership under Delaware law, and ML Opportunity Management
Inc., a Delaware corporation and an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. The General Partner was
formed for the purpose of acting as general partner of the
Partnership. The General Partner's total capital contribution
was $1,132,800 at December 31, 1994 which represents 1% of the
total Partnership capital contributions.
Pursuant to the terms of the Amended and Restated Agreement of
Limited Partnership, the General Partner is liable for all
general obligations of the Partnership to the extent not paid by
the Partnership. The limited partners are not liable for the
obligations of the Partnership in excess of the amount of their
contributed capital.
The purpose of the Partnership is to acquire, finance, hold,
develop, improve, maintain, operate, lease, sell, exchange,
dispose of and otherwise invest in and deal with media businesses
and direct and indirect interests therein.
Certain 1994 items have been reclassified to conform to 1995
presentation.
In the opinion of the General Partner, the financial statements
include all adjustments necessary to reflect fairly the results
of the interim periods presented. All adjustments are of a
normal recurring nature, except as disclosed in Note 3.
Additional information, including the audited year end 1994
Financial Statements and the Summary of Significant Accounting
Policies, is included in the Partnership's filing on Form 10-K
for the year ended December 31, 1994 on file with the Securities
and Exchange Commission.
2. Liquidity
At September 30, 1995, the Partnership had $1,165,154 in cash and
cash equivalents.
The Partnership consummated the sale of WMXN-FM on February 21,
1995 (see below), and made a cash distribution to Limited
Partners of $26 per unit from the net distributable sales
proceeds.
The Partnership consummated the sale of stock of Avant
Development Corporation ("Avant"), the corporation which owns
television station WRBL-TV on September 15, 1995. The
Partnership is currently marketing the remaining two TCS
television stations for potential sale during the first half of
1996. (See below.)
During the remainder of 1995 and 1996, the Partnership will
continue to attempt to sell or otherwise dispose of all of its
remaining investments in media properties and anticipates
completing these actions prior to December 31, 1996. The status
of all of the Partnership's investments is discussed in more
detail below.
Sale of WMXN-FM
The Partnership entered into an Option Agreement, effective
January 25, 1994, with US Radio, Inc. ("US Inc."), a Delaware
corporation, and an affiliated entity, US Radio, L.P. ("US
Radio"), a Delaware limited partnership, neither of which is
affiliated with the Partnership. Pursuant to the Option
Agreement, the Partnership granted US Inc. an option (the
"Call"), exercisable at any time prior to January 15, 1995, to
purchase substantially all of the assets of WMXN-FM (the
"Assets") for a cash price of $3.5 million. On September 23,
1994, US Inc. exercised the Call. On October 24, 1994, the
Partnership and US Radio of Norfolk, Inc. ("US Norfolk"), an
affiliate of US Inc. to which US Inc. assigned its option to
purchase WMXN-FM, filed an application with the FCC requesting
assignment of the license of WMXN-FM from the Partnership to US
Norfolk pursuant to the terms of an Asset Purchase Agreement.
Following receipt of FCC approval, on February 21, 1995, US
Norfolk purchased WMXN-FM for approximately $3.5 million, subject
to a future adjustment based on a post-closing accounting
reconciliation between US Norfolk and the Partnership required by
the Asset Purchase Agreement. The Partnership does not currently
anticipate that such potential future adjustment will be
material. Following payment of a transaction fee to a third
party unaffiliated with the Partnership or its affiliates,
approximately $3.3 million was remitted to the Partnership. In
addition, on March 7, 1995, approximately $400,000 was returned
to the Partnership from WMXN-FM's cash balances.
Effective January 31, 1994, the Partnership entered into a Time
Brokerage Agreement (the "LMA") with US Radio. The LMA called
for the Partnership to make broadcasting time available on WMXN-
FM to US Radio and for US Radio to provide radio programs to be
broadcast on WMXN-FM, subject to certain terms and conditions,
including the rules and regulations of the FCC. In exchange for
providing broadcasting time to US Radio, the Partnership received
a monthly fee approximately equal to its cost of operating WMXN-
FM. The LMA continued until the consummation of the acquisition
of WMXN-FM by US Norfolk.
TCS
TCS is in default of certain covenants under its note agreements
as of September 30, 1995. TCS expects to default on the majority
of its scheduled principal payments under its note agreements for
the remainder of 1995. TCS engaged in discussions with its note
holders regarding a potential restructuring of TCS's note
agreements, but ultimately decided to pursue a sale of the TCS
stations. The Partnership engaged Furman Selz Incorporated to
assist in marketing the TCS television stations for sale. The
marketing of the sale of such stations commenced in December
1994.
On September 15, 1995, TCS Television, Inc., a wholly owned
subsidiary of TCS, completed the sale to The Spartan Radiocasting
Company ("Spartan") of all of the outstanding capital stock of
Avant for a net sales price of $22.7 million. From the proceeds
of the sale, a reserve of approximately $1.4 million was
established to cover certain expenses and liabilities relating to
the sale and $1,250,000 was deposited into an indemnity escrow to
secure TCS Television, Inc.'s indemnification obligations to
Spartan for taxes and other liabilities. In addition,
approximately $18.9 million was applied to repay a portion of
TCS' total indebtedness of approximately $43 million as of
December 1994, which is secured by a pledge of the shares of
Fabri Development Corporation ("Fabri"), another wholly owned
subsidiary of TCS Television, Inc. which owns and operates KQTV,
St. Joseph Missouri and WTWO-TV Terre Haute, Indiana and
approximately $1.1 million was used to pay closing costs. The
Partnership is actively marketing these two stations for
potential sale during the first half of 1996. The Partnership
recognized a gain, for financial reporting purposes, on the sale
of Avant of approximately $17.6 million, offset by a reserve for
estimated losses on the sale of the remaining television stations
of TCS of approximately $9.9 million.
During the process of marketing the TCS television stations,
while TCS remains in default, the note holders have the option to
exercise their rights under the notes, which rights include the
right to foreclose on the stock of Fabri, but not the other
assets of the Partnership. Whether or not the Partnership is
able to sell all the TCS television stations, it is unlikely that
the Partnership will recover more than a nominal amount of its
investment in TCS.
Paradigm
Paradigm and/or BBAD are not currently producing television
programs, and the Partnership has not advanced any funds to
Paradigm and/or BBAD since the second quarter of 1992. Paradigm
and/or BBAD took several steps in 1992 and 1993 to reduce
operating costs, primarily by reducing the number, and
compensation, of employees. However, Paradigm and/or BBAD did not
operate profitably during 1993, and were dependent on outside
sources, primarily Bob Banner Associates Inc. ("Associates"), to
finance BBAD's monthly operating costs. The Partnership elected
not to fund such operating costs. The Partnership actively
sought a strategic partner that would share in meeting Paradigm's
and/or BBAD's potential future funding needs but was unable to
identify such a partner. Paradigm and/or BBAD have no liability
for borrowed funds. The Partnership has entered into an
agreement with Associates under which Paradigm retains the three
television movies and the series developed by it, and the other
projects and program concepts developed by Paradigm and/or BBAD
were assigned to Associates, and Paradigm retained a percentage
interest in all such projects and concepts. It is the
Partnership's intention to attempt to sell its interest in the
Paradigm and/or BBAD programs and projects. However, it is
unlikely that the Partnership will recover more than a nominal
portion, if any, of its original investment in Paradigm and/or
BBAD.
Investments and EMP, Ltd. and MVT
Investments, MVT, EMP, Ltd. and their affiliates are currently
reliant on their cash balances, existing operations, and/or
additional funding from ALP Enterprises or other, as yet
unidentified, financing sources to fund their continuing
operations. The Partnership expects to advance no further funds
to Investments, MVT or their affiliates beyond those funds
already advanced by the Partnership.
Effective August 12, 1994, the Partnership and EMP, Ltd.
restructured the ownership of EMP, Ltd. and certain of its
subsidiaries in order to enable EMP, Ltd. to attract additional
capital from ALP Enterprises and other potential third party
investors. In the restructuring, based on certain
representations from EMP, Ltd. and ALP Enterprises, the
Partnership sold to Clarendon and ALP Enterprises for nominal
consideration the Partnership's shares in EMP, Ltd.
Simultaneously, the Partnership and EMP, Ltd. entered into an
agreement whereby EMP, Ltd.'s 10% interest in Teletext was
transferred, together with a 350,000 loan (approximately $543,000
at then-current exchange rates) from EMP, Ltd. to a newly formed
entity, MV Technology Limited ("MVT"). After the transfer, the
Partnership owns 13.8% of the issued common shares of MVT, while
EMP, Ltd. owns the remaining 86.2%. MVT's sole purpose is to
manage its 10% interest in Teletext. The Partnership has the
right to require EMP, Ltd. to purchase the Partnership's interest
in MVT at any time between December 31, 1994 and December 31,
1997. EMP, Ltd. has the right to require the Partnership to sell
the Partnership's interest in MVT to EMP, Ltd. at any time
between September 30, 1995 and September 30, 1998. MVT will pay
an annual fee to EMP, Ltd. for management services provided by
EMP, Ltd. in connection with overseeing MVT's investment in
Teletext. Following the restructuring, the Partnership no longer
has any interest in EMP, Ltd. It is likely the Partnership will
not recover the majority of its $2 million investment in
Investments either from Investments or from MVT.
IMP/Intelidata
Effective July 1, 1993, the Partnership entered into three
transactions to sell the business and assets of IMPLP/IMPI and
Intelidata. In two separate transactions, the Partnership sold
the entire business and substantially all of the assets of
IMPLP/IMPI and a portion of the business and assets of Intelidata
to Phillips Business Information, Inc. ("PBI") for future
consideration based on the revenues of IMPLP/IMPI and the portion
of the Intelidata business acquired by PBI. PBI is not
affiliated with the Partnership. At closing, PBI made advances
of $100,000 and $150,000 to IMPLP/IMPI and Intelidata,
respectively, which advances would be recoverable by PBI from any
future consideration payable by PBI to the Partnership. In
addition, PBI agreed to assume certain liabilities of IMPLP/IMPI
and Intelidata.
In the third transaction, the Partnership sold the remaining
business and assets of Intelidata, which were not sold to PBI, to
Romtec plc ("Romtec") in exchange for future consideration, based
on both the amount of assets and liabilities transferred to
Romtec and the combined profits of the portion of the Intelidata
business acquired by Romtec and another, existing division of
Romtec. In addition, certain liabilities of Intelidata were
assumed by Romtec. Romtec is not affiliated with the
Partnership.
As a result of the above transactions, the Partnership recorded a
writedown of approximately $364,000 of certain assets of
IMPLP/IMPI/Intelidata in the second quarter of 1993 to reduce the
Partnership's net investment to a net realizable value of zero.
Subsequent to the sale of the businesses, the Partnership
advanced net additional funds totaling approximately $0.1 million
to IMPLP/IMPI and Intelidata to fund cash shortfalls resulting
from the pre-sale claims of certain creditors. The Partnership
anticipates that it may make additional such advances to
IMPLP/IMPI and Intelidata during 1995. The total of any
Partnership obligations to fund such advances, including certain
contractual obligations, is not currently anticipated to exceed
the amount of the writedown. It is unlikely that the Partnership
will recover any portion of its investment in
IMPLP/IMPI/Intelidata.
GCC/WWC
On January 20, 1994, the majority stockholders of GCC and certain
holders of interest in MARKETS Cellular Limited Partnership
("Markets"), and PN Cellular, Inc. ("PNCI") executed a Memorandum
of Intention (the "Memorandum") pursuant to which the parties
thereto expressed their intent to effect a proposed business
combination of GCC and Markets.
The Partnership executed an Exchange Agreement and Plan of Merger
("Agreement"), dated July 20, 1994, to which the majority
stockholders of GCC and the majority owners of Markets are
parties. Pursuant to the Agreement, the Partnership exchanged
its shares in GCC for an equal number of shares in Western
Wireless Corporation ("WWC"), a new company which was organized
to own the equity interests of GCC and Markets. Following the
consummation of the business combination on July 29, 1994, WWC
became the owner of 100% of the partnership interests in Markets
and approximately 95% of the outstanding common stock of GCC.
WWC holds and operates cellular licenses covering approximately
5.6 million net pops (defined as the population in an area
covered by a cellular franchise) including pending acquisitions.
As of September 30, 1995, the Partnership's 351,665 shares in WWC
represented an ownership percentage equal to approximately 2.4%.
Summary
In summary of the Partnership's liquidity status, the
approximately $1.1 million that the Partnership has available for
working capital is not sufficient to meet all of the contractual
debt obligations of all of its investments. The Partnership has
no contractual commitment to advance funds to any of its
investments, other than its obligation to fund cash shortfalls
resulting from pre-sale claims related to its former investments
in IMPLP/IMPI and Intelidata.
3. DISCONTINUED OPERATIONS
Television and Radio Station Segment
Due to the disposition of WMXN-FM on February 21, 1995 and the
Partnership's decision to sell TCS (see Note 2), the Partnership
has presented its Television and Radio Station Segment (comprised
of WMXN-FM and TCS) as discontinued operations. The September
30, 1994 Consolidated Statement of Operations and Consolidated
Statement of Cash Flows, have each been restated to present such
discontinued operations.
The net liabilities of the discontinued operations of this
segment on the Consolidated Balance Sheets are comprised of the
following:
<TABLE>
<CAPTION>
As of
December 31,
1994
<S> <C>
Property, plant and
equipment, net $ 5,833,854
Intangible assets, net 35,616,068
Other assets 14,597,378
Borrowings (42,999,804)
Other liabilities (19,184,542)
Net liabilities of
discontinued operations $ (6,137,046)
</TABLE>
The change in the net liabilities of this segment is due
primarily to the sale of WMXN-FM on February 21, 1995 the sale of
the capital stock of Avant on September 15, 1995 and the expected
loss on the disposition of the remaining stations comprising its
Television and Radio Station Segment. This expected loss has
offset the gain on the sale of the capital stock of Avant by
estimated losses of approximately $9.9 million. (See Note 2.)
Summarized results of the discontinued operations of this segment
on the Consolidated Statements of Operations are as follows:
<TABLE>
<CAPTION>
Thirteen Thirty-Nine
Weeks Ended Weeks Ended
September 30, September 30,
1994 1994
<S> <C> <C>
Operating Revenues $ 3,583,833 $10,669,231
Less: Operating Expenses 3,306,103 9,833,223
Operating Income 277,730 836,008
Interest Expense (1,313,946) (3,890,163)
Loss from discontinued
operations $(1,036,216) $(3,054,155)
</TABLE>
Cable Television Systems Segment
Due to the disposition of Windsor and Maryland Cable in 1994, the
results of the Cable Television Systems Segment (comprised of
Windsor and Maryland Cable) have been reported separately in the
September 30, 1994 Consolidated Statements of Operations and the
Consolidated Statement of Cash Flows as discontinued operations.
Summarized results of discontinued operations of this segment on
the Consolidated Statement of Operations are as follows:
<TABLE>
<CAPTION>
Thirty-Nine
Weeks Ended
September 30,
1994
<S> <C>
Operating Revenues $10,730,711
Less: Operating Expenses 9,750,040
Operating Income 980,671
Interest Expense (7,765,653)
Loss from discontinued operations $(6,784,982)
</TABLE>
Production Segment
Due to the expected disposition of Paradigm, the Partnership's
Production Segment is presented as discontinued operations. The
September 30, 1994 Consolidated Statement of Operations and
Consolidated Statement of Cash Flows have each been restated to
present such discontinued operations.
The net liabilities of the discontinued operations of this
segment on the Consolidated Balance Sheets are comprised of the
following:
<TABLE>
<CAPTION>
As of As of
September 30, December 31,
1995 1994
<S> <C> <C>
Cash $ 60,458 $ 105,650
Accounts payable and
accrued liabilities (201,169) (246,361)
Net liabilities of
discontinued operations $ (140,711) $ (140,711)
</TABLE>
Summarized results of the discontinued operations of this segment
on the Consolidated Statements of Operations are as follows:
<TABLE>
<CAPTION>
Thirteen Thirty-Nine
Weeks Ended Weeks Ended
September 30, September 30,
1994 1994
<S> <C>
Operating Revenues $ 1,015 $ 2,821
Less: Operating Expenses 36,705 48,648
Operating Loss (35,690) (45,827)
Minority Interest (480) (648)
Loss from discontinued
operations $ (36,170) $ (46,475)
</TABLE>
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources.
At September 30, 1995, Registrant had $1,165,154 in cash and cash
equivalents.
Registrant consummated the sale of WMXN-FM on February 21, 1995
(see below), and made a cash distribution to Limited Partners of
$26 per unit from the net distributable sale proceeds.
Registrant consummated the sale of stock of Avant Development
Corporation ("Avant"), the corporation which owns television
station WRBL-TV on September 15, 1995. Registrant is currently
marketing the remaining two TCS television stations for potential
sale during the first half of 1996. (See below.)
During the remainder of 1995 and 1996, Registrant will continue
to attempt to sell or otherwise dispose of all of its remaining
investments in media properties and anticipates completing these
actions prior to December 31, 1996.
In summary of Registrant's liquidity status, the approximately
$1.1 million that Registrant has available for working capital is
not sufficient to meet all of the contractual debt obligations of
all of its investments. Registrant has no contractual commitment
to advance funds to any of its investments, other than its
obligation to fund cash shortfalls resulting from pre-sale claims
related to its former investments in IMPLP/IMPI and Intelidata.
Sale of WMXN-FM
Registrant entered into an Option Agreement, effective January
25, 1994, with US Radio, Inc. ("US Inc."), a Delaware
corporation, and an affiliated entity, US Radio, L.P. ("US
Radio"), a Delaware limited partnership, neither of which is
affiliated with Registrant. Pursuant to the Option Agreement,
Registrant granted US Inc. an option (the "Call"), exercisable at
any time prior to January 15, 1995, to purchase substantially all
of the assets of WMXN-FM (the "Assets") for a cash price of $3.5
million. On September 23, 1994, US Inc. exercised the Call. On
October 24, 1994, Registrant and US Radio of Norfolk, Inc. ("US
Norfolk"), an affiliate of US Inc. to which US Inc. assigned its
option to purchase WMXN-FM, filed an application with the FCC
requesting assignment of the license of WMXN-FM from Registrant
to US Norfolk pursuant to the terms of an Asset Purchase
Agreement.
Following receipt of FCC approval, on February 21, 1995, US
Norfolk purchased WMXN-FM for approximately $3.5 million, subject
to a future adjustment based on a post-closing accounting
reconciliation between US Norfolk and Registrant required by the
Asset Purchase Agreement. Registrant does not currently
anticipate that such potential future adjustment will be
material. Following payment of a transaction fee to a third party
unaffiliated with Registrant or its affiliates, approximately
$3.3 million was remitted to Registrant. In addition, on March
7, 1995, approximately $400,000 was returned to Registrant from
WMXN's cash balances.
Effective January 31, 1994, Registrant entered into a Time
Brokerage Agreement (the "LMA") with US Radio. The LMA called
for Registrant to make broadcasting time available on WMXN-FM to
US Radio and for US Radio to provide radio programs to be
broadcast on WMXN-FM, subject to certain terms and conditions,
including the rules and regulations of the FCC. In exchange for
providing broadcasting time to US Radio, Registrant received a
monthly fee approximately equal to its cost of operating WMXN-FM.
The LMA continued until the consummation of the acquisition of
WMXN-FM by US Norfolk.
TCS
TCS is in default of certain covenants under its note agreements
as of September 30, 1995. TCS expects to default on the majority
of its scheduled principal payments under its note agreements for
the remainder of 1995. TCS engaged in discussions with its note
holders, but ultimately decided to pursue a sale of the TCS
stations. Registrant engaged Furman Selz Incorporated to assist
in marketing the TCS stations for sale. The marketing of the
sale of such stations commenced in December 1994.
On September 15, 1995, TCS Television, Inc., a wholly owned
subsidiary of TCS, completed the sale to The Spartan Radiocasting
Company ("Spartan") of all of the outstanding capital stock of
Avant for a net sales price of $22.7 million. From the proceeds
of the sale, a reserve of approximately $1.4 million was
established to cover certain expenses and liabilities relating to
the sale and $1,250,000 was deposited into an indemnity escrow to
secure TCS Television, Inc.'s indemnification obligations to
Spartan for taxes and other liabilities. In addition,
approximately $18.9 million was applied to repay a portion of
TCS' total indebtedness of approximately $43 million, as of
December 1994, which is secured by a pledge of the shares of
Fabri Development Corporation ("Fabri"), another wholly owned
subsidiary of TCS Television, Inc. which owns and operates KQTV,
St. Joseph Missouri and WTWO-TV Terre Haute, Indiana and
approximately $1.1 million in closing costs. The Partnership is
actively marketing these two stations for potential sale during
the first half of 1996. Registrant recognized a gain, for
financial reporting purposes, on the sale of Avant of
approximately $17.6 million, offset by a reserve for estimated
losses on the sale of the remaining television stations of TCS of
approximately $9.9 million.
During the process of marketing the TCS television stations,
while TCS remains in default, the note holders have the option to
exercise their rights under the notes, which rights include the
right to foreclose on the stock of Fabri but not the other assets
of Registrant. Whether or not Registrant is able to sell all the
TCS television stations, it is unlikely that Registrant will
recover more than a nominal amount of its investment in TCS.
Paradigm
Paradigm and/or BBAD are not currently producing television
programs, and Registrant has not advanced any funds to Paradigm
and/or BBAD since the second quarter of 1992. Paradigm and/or
BBAD took several steps in 1992 and 1993 to reduce operating
costs, primarily by reducing the number, and compensation, of
employees. However, Paradigm and/or BBAD did not operate
profitably during 1993, and were dependent on outside sources,
primarily Bob Banner Associates Inc. ("Associates"), to finance
BBAD's monthly operating costs. Registrant elected not to fund
such operating costs. Registrant has no obligation to advance
any additional funds to Paradigm and/or BBAD and actively sought
a strategic partner that would share in meeting Paradigm's and/or
BBAD's potential future funding needs but was unable to identify
such a partner. Registrant has entered into an agreement with
Associates under which Paradigm retains the three television
movies and the series developed by it, and the other projects and
program concepts developed by Paradigm and/or BBAD were assigned
to Associates, and Paradigm retained a percentage interest in all
such projects and concepts. It is Registrant's intention to
attempt to sell its interest in the Paradigm and/or BBAD programs
and projects. However, it is unlikely that Registrant will
recover more than a nominal portion, if any, of its original
investment in Paradigm and/or BBAD.
Investments and EMP, Ltd. and MVT
Investments, MVT, EMP, Ltd. and their affiliates are currently
reliant on their cash balances, existing operations, and/or
additional funding from ALP Enterprises or other, as yet
unidentified, financing sources to fund their continuing
operations. Registrant expects to advance no further funds to
Investments, MVT, or their affiliates beyond those funds already
advanced by Registrant.
Effective August 12, 1994, Registrant and EMP, Ltd. restructured
the ownership of EMP, Ltd. and certain of its subsidiaries in
order to enable EMP, Ltd. to attract additional capital from ALP
Enterprises and other potential third party investors. In the
restructuring, based on certain representations from EMP, Ltd.
and ALP Enterprises, Registrant sold to Clarendon and ALP
Enterprises for nominal consideration Registrant's shares in EMP,
Ltd. Simultaneously, Registrant and EMP, Ltd. entered into an
agreement whereby EMP, Ltd.'s 10% interest in Teletext was
transferred, together with a 350,000 loan (approximately $543,000
at then-current exchange rates) from EMP, Ltd. to a newly formed
entity, MV Technology Limited ("MVT"). After the transfer,
Registrant owns 13.8% of the issued common shares of MVT, while
EMP, Ltd. owns the remaining 86.2%. MVT's sole purpose is to
manage its 10% interest in Teletext. Registrant has the right to
require EMP, Ltd. to purchase Registrant's interest in MVT at any
time between December 31, 1994 and December 31, 1997. EMP, Ltd.
has the right to require Registrant to sell Registrant's interest
in MVT to EMP, Ltd. at any time between September 30, 1995 and
September 30, 1998. MVT will pay an annual fee to EMP, Ltd. for
management services provided by EMP, Ltd. in connection with
overseeing MVT's investment in Teletext. Following the
restructuring, Registrant no longer has any interest in EMP, Ltd.
It is likely that Registrant will not recover the majority of its
$2 million investment in Investments either from Investments or
from MVT.
IMP/Intelidata
Effective July 1, 1993, Registrant entered into three
transactions to sell the business and assets of IMPLP/IMPI and
Intelidata. In two separate transactions, Registrant sold the
entire business and substantially all of the assets of IMPLP/IMPI
and a portion of the business and assets of Intelidata to
Phillips Business Information, Inc. ("PBI") for future
consideration based on the revenues of IMPLP/IMPI and the portion
of the Intelidata business acquired by PBI. PBI is not
affiliated with Registrant. At closing, PBI made advances of
$100,000 and $150,000 to IMPLP/IMPI and Intelidata, respectively,
which advances would be recoverable by PBI from any future
consideration payable by PBI to Registrant. In addition, PBI
agreed to assume certain liabilities of IMPLP/IMPI and
Intelidata.
In the third transaction, Registrant sold the remaining business
and assets of Intelidata, which were not sold to PBI, to Romtec
plc ("Romtec") in exchange for future consideration, based on
both the amount of assets and liabilities transferred to Romtec
and the combined profits of the portion of the Intelidata
business acquired by Romtec and another, existing division of
Romtec. In addition, certain liabilities of Intelidata were
assumed by Romtec. Romtec is not affiliated with Registrant.
As a result of the above transactions, Registrant recorded a
writedown of approximately $364,000 of certain assets of
IMPLP/IMPI/Intelidata in the second quarter of 1993 to reduce
Registrant's net investment to a net realizable value of zero.
Subsequent to the sale of the businesses, Registrant advanced net
additional funds totaling approximately $0.1 million to
IMPLP/IMPI and Intelidata to fund cash shortfalls resulting from
the pre-sale claims of certain creditors. Registrant anticipates
that it may make additional such advances to IMPLP/IMPI and
Intelidata during 1995. The total of any Registrant obligations
to fund such advances, including certain contractual obligations,
is not currently anticipated to exceed the amount of the
writedown. It is unlikely that Registrant will recover any
portion of its investment in IMPLP/IMPI/Intelidata.
GCC/WWC
On January 20, 1994, the majority stockholders of GCC and certain
holders of interest in MARKETS Cellular Limited Partnership
("Markets"), and PN Cellular, Inc. ("PNCI") executed a Memorandum
of Intention (the "Memorandum") pursuant to which the parties
thereto expressed their intent to effect a proposed business
combination of GCC and Markets.
Registrant executed an Exchange Agreement and Plan of Merger
("Agreement"), dated July 20, 1994, to which the majority
stockholders of GCC and the majority owners of Markets are
parties. Pursuant to the Agreement, Registrant exchanged its
shares in GCC for an equal number of shares in Western Wireless
Corporation ("WWC"), a new company which was organized to own the
equity interests of GCC and Markets. Following the consummation
of the business combination on July 29, 1994, WWC became the
owner of 100% of the partnership interests in Markets and
approximately 95% of the outstanding common stock of GCC. WWC
holds and operates cellular licenses covering approximately 5.6
million net pops (defined as the population in an area covered by
a cellular franchise) including pending acquisitions.
As of September 30, 1995, Registrant's 351,665 shares in WWC
represented an ownership percentage equal to approximately 2.4%.
Results of Operations.
For the thirteen week periods ended September 30, 1995 and
September 30, 1994:
Registrant generated a loss from Partnership operations in the
third quarter of 1995 of approximately $601,000 which was
comprised primarily of management fees of approximately $589,000.
The loss from Partnership operations decreased from approximately
$683,000 in the third quarter of 1994 to approximately $601,000
in the third quarter of 1995 primarily due to reduced management
fees as a result of fewer operating properties in the third
quarter of 1995, and no amortization expense in the third quarter
1995 due to the full amortization of certain deferred assets at
the end of 1994, offset by a decrease in interest income in the
third quarter of 1995, as compared to the same period in 1994.
Registrant's interest income in the third quarter of 1994
represents primarily interest income Registrant earned through
its ML Cable affiliate on ML Cable's $6.8 million participation
it held in the senior bank debt of Maryland Cable.
In addition to Registrant's loss from Partnership operations
described above, Registrant's net income in the third quarter of
1995 of approximately $7.2 million is comprised of a gain of
approximately $17.6 million on the sale of the capital stock of
Avant Development Corporation and additional anticipated losses
on the sale of the remaining TCS stations of approximately $9.9
million. In addition to Registrant's loss from Partnership
operations described above, Registrant's net income in the third
quarter of 1994 of approximately $129.2 million is primarily
comprised of a gain of approximately $130.3 million from the sale
of Maryland Cable in the 1994 period.
For the thirty-nine week periods ended September 30, 1995 and
September 30, 1994:
Registrant generated a loss from Partnership operations in the
first three quarters of 1995 of approximately $1.7 million, which
was comprised primarily of management fees of approximately $1.8
million.
The loss from Partnership operations decreased from approximately
$2.4 million for the first three quarters of 1994 to
approximately $1.7 million for the first three quarters of 1995
primarily due to reduced management fees as a result of fewer
operating properties in the first three quarters of 1995, and no
amortization expense in the first three quarters of 1995 due to
the full amortization of certain deferred assets at the end of
1994. In addition, Registrant recognized income in the second
quarter of 1995 related to management services it provided to
Maryland Cable prior to its disposition of Maryland Cable, offset
by a decrease in interest income in the three quarters of 1995,
as compared to the same period in 1994. Registrant's interest
income in the three quarters of 1994 represents primarily
interest income Registrant earned through its ML Cable affiliate
on ML Cable's $6.8 million participation it held in the senior
bank debt of Maryland Cable.
In addition to the Registrant's loss from Partnership operations
described above, Registrant's net income in the first three
quarters of 1995 of approximately $7.8 million, is comprised of a
gain of approximately $17.6 million on the sale of the capital
stock of Avant Development Corporation, a gain of approximately
$1.7 million on the sale of radio station WMXN-FM and additional
anticipated losses on the sale of the remaining TCS stations of
approximately $9.9 million. In addition to Registrant's loss
from Partnership operations described above, Registrant's net
income in the first three quarters of 1994 of approximately
$118.6 million is primarily comprised of a gain of approximately
$130.3 million from the sale of Maryland Cable in the 1994
period, offset by discontinued operations loss of $9.3 million.
PART II - OTHER INFORMATION.
Item 3. Defaults Upon Senior Securities
Reference is hereby made to Part I Item 1. Financial Statements
Footnote 2. Liquidity.
Item 6. Exhibits and Reports on Form 8-K
A). Exhibits:
Exhibit # Description
27. Financial Data Schedule
B). Reports on Form 8-K
None
<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.
ML MEDIA OPPORTUNITY PARTNERS, L.P.
By: Media Opportunity Management Partners
General Partner
By: RP Opportunity Management, L.P.
General Partner
By: IMP Opportunity Management Inc.
Dated: November 14, 1995 /s/ I. Martin Pompadur
I. Martin Pompadur
Director and President
(principal executive officer
of the Registrant)
<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.
ML MEDIA OPPORTUNITY PARTNERS, L.P.
By: Media Opportunity Management
Partners
General Partner
By: ML Opportunity Management Inc.
Dated: November 14, 1995 /s/ Kevin K. Albert
Kevin K. Albert
Director and President
Dated: November 14, 1995 /s/ Robert F. Aufenanger
Robert F. Aufenanger
Director and Executive Vice President
Dated: November 14, 1995 /s/ Diane T. Herte
Diane T. Herte
Treasurer
(principal accounting officer and
principal financial officer
of the Registrant)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the quarter ended 1995 Form
10-Q Consolidated Balance Sheets and Consolidated
Statements of Operations as of September 30, 1995, and
is qualified in its entirety by reference to such
financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,165
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,510
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,763
<TOTAL-LIABILITY-AND-EQUITY> 2,510
<SALES> 0
<TOTAL-REVENUES> 225
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,795
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,746)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,746)
<DISCONTINUED> 9,471
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,725
<EPS-PRIMARY> 68.19
<EPS-DILUTED> 0
</TABLE>
