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
March 31,1995
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 March 31, 1995
(Unaudited) and December 31, 1994 (Unaudited)
Consolidated Statements of Operations for the
thirteen week periods ended March 31, 1995
(Unaudited), and March 31, 1994 (Unaudited)
Consolidated Statements of Cash Flows for the
thirteen week periods ended March 31, 1995
(Unaudited), and March 31, 1994 (Unaudited)
Notes to the Consolidated Financial Statements
for the thirteen week period ended March 31,
1995 (Unaudited)
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<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1995 (UNAUDITED)
AND DECEMBER 31, 1994 (UNAUDITED)
March 31, December 31,
Notes 1995 1994
<S> <C> <C> <C>
ASSETS:
Cash and cash
equivalents 2 $ 4,803,674 $ 2,150,473
Investment in joint
venture and common
stock 2 1,261,666 1,261,666
Other assets 539,560 537,901
TOTAL ASSETS $ 6,604,900 $ 3,950,040
LIABILITIES AND
PARTNERS' DEFICIT:
Liabilities:
Accounts payable and
accrued liabilities $ 624,596 $ 688,288
Net Liabilities of
Discontinued
Operations: 2,3
Production Segment 140,711 140,711
Television and Radio
Station Segment 7,786,731 6,137,046
Total Liabilities $ 8,552,038 $ 6,966,045
Commitments and
Contingencies 2
(Continued on the following page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 1995 (UNAUDITED)
AND DECEMBER 31, 1994 (UNAUDITED)
(continued)
March 31, December 31
Notes 1995 1994
<S> <C> <C> <C>
Partners' Deficit:
General Partners:
Capital contributions,
net of offering
expenses 1 1,019,428 1,019,428
Cash Distribution (90,624) (90,624)
Cumulative loss (927,783) (938,472)
1,021 (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
distribution (2,040,121) (2,040,121)
Other cash distribution
(8,971,760) (8,971,760)
Cumulative loss (91,850,594) (92,908,772)
(1,948,159) (3,006,337)
Total Partners' Deficit
(1,947,138) (3,016,005)
TOTAL LIABILITIES AND
PARTNERS' DEFICIT $ 6,604,900 $ 3,950,040
See Notes to Consolidated Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEK PERIODS ENDED
MARCH 31, 1995 (UNAUDITED)
AND MARCH 31, 1994 (UNAUDITED)
March 31, March 31,
Note 1995 1994
s
<S> <C> <C> <C>
Partnership
Operating Expenses:
General and
administrative 36,936 26,756
Amortization - 74,490
Management fees 617,015 784,643
653,951 885,889
Interest Income $ 38,490 $ 21,343
Loss from
Partnership
operations (615,461) (864,546)
(Continued on the following page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEK PERIODS ENDED
MARCH 31, 1995 (UNAUDITED)
AND MARCH 31, 1994 (UNAUDITED)
(Continued)
March 31, March 31,
Notes 1995 1994
<S> <C> <C> <C>
Discontinued operations:
Income(Loss) from
discontinued operations of:
2,3
Cable Television Systems
Segment - (6,784,982)
Production Segment - (5,420)
Television and Radio Station
Segment - (1,188,812)
Gain on Sale of Radio
Station 1,684,328 -
NET INCOME (LOSS) $ 1,068,867 $(8,843,760)
Per Unit of Limited
Partnership Interest:
Loss from Partnership
Operations $ (5.43) $ (7.63)
Income(loss) from
discontinued operations 14.87 (70.44)
NET INCOME(LOSS) $ 9.44 $ (78.07)
Number of Units 112,147.1 112,147.1
See Notes to Consolidated Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995
(UNAUDITED) AND MARCH 31, 1994 (UNAUDITED)
March 31, March 31,
1995 1994
<S> <C> <C>
Cash flows from
operating activities:
Net Income(Loss) $ 1,068,867 $(8,843,760)
Adjustments to reconcile
net income(loss) to net
cash used in operating
activities:
Depreciation and
amortization - 74,490
Gain on Sale of Radio
Station (1,684,328) -
(Continued on the following page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995
(UNAUDITED) AND MARCH 31, 1994 (UNAUDITED)
(Continued)
March 31, March 31,
1995 1994
<S> <C> <C>
Change in operating
assets and liabilities:
(Increase)/decrease in
other assets (1,659) 4,429
Decrease in accounts
payable and accrued
liabilities (63,692) (27,317)
Change in Net
Liabilities
of Discontinued
Operations:
Cable Television Systems
Segment - 7,108,984
Television and Radio
Station Segment - 1,475,465
Production Segment - 5,420
(Continued on the following page)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995
(UNAUDITED) AND MARCH 31, 1994 (UNAUDITED)
(continued)
March 31, March 31,
1995 1994
<S> <C> <C>
Net cash used in operating
activities (680,812) (202,289)
Cash flows from investing
activities:
Purchase of property,
plant and equipment - (308,546)
Proceeds from sale of radio
station 3,334,013 -
Net cash provided by/(used
in) investing activities 3,334,013 (308,546)
Net increase/(decrease) in
cash and cash equivalents 2,653,201 (510,835)
Cash and cash equivalents
at beginning of year 2,150,473 3,739,678
Cash and cash equivalents
at end of period $ 4,803,674 $ 3,228,843
Supplemental Disclosure:
Effective February 21, 1995, the Partnership sold the assets of
radio station WMXN-FM.
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
ML MEDIA OPPORTUNITY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEK PERIOD ENDED MARCH 31, 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.
Statement of Financial Accounting Standards No. 112
Effective January 1, 1994, the Partnership adopted Statement of
Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits" ("SFAS No. 112"). This
pronouncement establishes accounting standards for employers who
provide benefits to former or inactive employees after
employment, but before retirement. These benefits include, but
are not limited to, salary-continuation, disability related
benefits including workers' compensation, and continuation of
health care and life insurance benefits. The statement requires
employers to accrue the obligations associated with service
rendered to date for employee benefits accumulated or vested
where payment is probable and can be reasonably estimated. The
effect of the adoption of SFAS No. 112 was not material to the
Partnership's financial position or results of operations.
2. Liquidity
At March 31, 1995, the Partnership had $4,803,674 in cash and
cash equivalents.
The Partnership consummated the sale of WMXN-FM on February 21,
1995 (see below), and plans to make a cash distribution to
Partners from the net distributable sales proceeds by mid-May,
1995.
The Partnership is currently marketing TCS for potential sale in
1995 and, on January 13, 1995, entered into a non-binding letter
of intent to sell the stock of Avant Development Corporation, the
corporation which owns television station WRBL-TV (see below).
During 1995, the Partnership will attempt to sell or otherwise
dispose of all of its remaining investments in media properties,
and then liquidate; however, there can be no assurance that the
Partnership will be successful in completing such actions prior
to December 31, 1995. 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 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, 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 was in default of covenants under its note agreements as of
March 31, 1995, and had failed to make scheduled principal
payments totalling $2,875,000 as of February 28, 1995. TCS also
expects to default on the majority of its scheduled principal
payments 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 of 1994. It is the Partnership's intention to
actively pursue a sale of the TCS television stations. On
January 13, 1995, the Partnership entered into a non-binding
letter of intent to sell the stock of Avant Development
Corporation ("Avant"), a 100%-owned corporate subsidiary of TCS,
Inc. which owns WRBL-TV. The sale of Avant is subject to
negotiation of a definitive purchase and sale agreement and
numerous other conditions. The ultimate transfer of the license
of WRBL-TV to a potential buyer, via the sale of the stock of
Avant, will also be subject to the prior approval of the FCC.
The Partnership may not ultimately be able to reach a final
agreement with potential purchasers on terms acceptable to the
Partnership. 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 the operating
subsidiaries that own the three TCS stations, but not the other
assets of the Partnership. Whether or not the Partnership is
able to sell 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 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. 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 profits. 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.
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 "pounds" 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. The Partnership elected not to
advance further funds to investments or MVT. 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 the
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 March 31, 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, of the
approximately $4.8 million that the Partnership has available for
working capital, a portion representing the net distributable
sales proceeds of the WMXN-FM sale will be distributed to
Partners in mid-May, 1995. Remaining working capital may be
utilized to support possible funding needs, or possible
restructurings, as appropriate, of its investments. The
Partnership has no contractual commitment to advance funds to any
of its existing investments.
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 March 31,
1994 Consolidated Statement of Operations and Consolidated
Statement of Cash Flows, have each been restated to present such
discontinued operations.
The net liabilities of discontinued operations of this segment on
the Consolidated Balance Sheets are comprised of the following:
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
1995 1994
<S> <C> <C>
Property, plant and
equipment, net $ 5,452,328 $ 5,833,854
Intangible assets, net 33,833,261 35,616,068
Other assets 15,425,328 14,597,378
Borrowings (42,999,804) (42,999,804)
Other liabilities (19,497,844) (19,184,542)
Net liabilities of
discontinued operations $ (7,786,731) $ (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.
Summarized results of the discontinued operations of this segment
on the March 31, 1994 Consolidated Statements of Operations are
as follows:
<TABLE>
<CAPTION>
13 Weeks Ended
March 31, 1994
<S> <C>
Operating Revenues $ 3,418,309
Less: Operating Expenses 3,327,390
Operating Income 90,919
Interest Expense (1,279,731)
Loss from discontinued operations $(1,188,812)
</TABLE>
The Partnership expects to continue to recognize gains on the
disposition of each station comprising its Television and Radio
Station Segment.
Cable Television Systems Segment
Due to the disposition of Windsor and Maryland Cable in 1994, the
results of the Cable Television Segment (comprised of Windsor and
Maryland Cable) have been reported separately in the March 31,
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 March 31, 1994 Consolidated Statement of Operations are as
follows:
<TABLE>
<CAPTION>
13 Weeks Ended
March 31, 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 in 1995, the
Partnership's Production Segment is presented as discontinued
operations. The March 31, 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
March 31, December 31,
1995 1994
<S> <C> <C>
Cash $ 75,209 $ 105,650
Accounts payable and
accrued liabilities (215,920) (246,361)
Net liabilities of
discontinued operations $ (140,711) $ (140,711)
</TABLE>
Summarized results of the discontinued operations of this segment
on the March 31, 1994 Consolidated Statements of Operations are
as follows:
<TABLE>
<CAPTION>
13 Weeks Ended
March 31, 1994
<S> <C>
Operating Revenues $ 905
Less: Operating Expenses 5,994
Operating Loss (5,089)
Minority Interest (331)
Loss from discontinued
operations $ (5,420)
</TABLE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1995, Registrant had $4,803,674 in cash and cash
equivalents.
Registrant consummated the sale of WMXN-FM on February 21, 1995
(see below), and plans to make a cash distribution to Partners
from the net distributable sales proceeds by mid-May, 1995.
Registrant is currently marketing TCS for potential sale in 1995
and, on January 13, 1995, entered into a non-binding letter of
intent to sell the stock of Avant Development Corporation, the
corporation which owns television station WRBL-TV (see below).
During 1995, Registrant will attempt to sell or otherwise dispose
of all of its remaining investments in media properties, and then
liquidate; however, there can be no assurance that Registrant
will be successful in completing such actions prior to December
31, 1995.
In summary of Registrant's liquidity status, of the approximately
$4.8 million that Registrant has for working capital, a portion
representing the net distributable sales proceeds of the WMXN-FM
sale will be distributed to Partners in mid-May, 1995. Remaining
working capital may be utilized to support possible funding
needs, or possible restructurings, as appropriate, of its
investments. Registrant has no contractual commitment to advance
funds to any of its existing investments.
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 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
not affiliated 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
As of March 31, 1995, TCS was in default of covenants under its
note agreements and had failed to make scheduled principal
payments totaling $2,875,000 as of February 28, 1995. In
addition, TCS expects to default on the majority of its scheduled
principal payments 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 of 1994. It is Registrant's intention to actively
pursue a sale of the TCS television stations. On January 13,
1995, Registrant entered into a non-binding letter of intent to
sell the stock of Avant Development Corporation ("Avant"), a 100%-
owned corporate subsidiary of TCS, Inc. which owns WRBL-TV. The
sale of Avant is subject to negotiation of a definitive purchase
and sale agreement and numerous other conditions. The ultimate
transfer of the license of WRBL-TV to a potential buyer, via the
sale of the stock of Avant, will also be subject to the prior
approval of the FCC. Registrant may not ultimately be able to
reach a final agreement with potential purchasers on terms
acceptable to Registrant. 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 the
operating subsidiaries that own the three TCS stations, but not
the other assets of Registrant. 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 profits. 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 "pounds" 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.
Registrant elected not to advance further funds to Investments or
MVT. 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 March 31, 1995, Registrant's 351,665 shares in WWC
represented an ownership percentage equal to approximately 2.4%.
Results of Operations
1995 vs. 1994
Registrant generated net income of approximately $1.1 million in
the first quarter of 1995, which was comprised primarily of a
gain of approximately $1.7 million on the sale of radio station
WMXN-FM, partially offset by management fees of approximately
$0.6 million.
The loss from Partnership operations was approximately $0.6
million in the first quarter of 1995 compared to approximately
$0.9 million in the first quarter of 1994. The approximate $0.3
million decrease was due primarily to a reduction in management
fees paid as a result of fewer operating properties in the first
quarter of 1995, and no amortization expense in the first quarter
of 1995 due to the full amortization of certain deferred assets
at the end of 1994. Slightly higher interest income was mostly
offset by slightly higher general and administrative expenses in
the first quarter of 1995 compared to the first quarter of 1994.
Registrant's net income in the first quarter of 1995 of
approximately $1.1 million is not comparable to Registrant's net
loss of approximately $8.8 million in the first quarter of 1994
due primarily to the disposition of Maryland Cable (which was
Registrant's major operating property) during 1994.
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 5. Other Information
None.
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: RP Opportunity Management, L.P.
General Partner
By: IMP Opportunity Management Inc.
Dated: May 15, 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: May 15, 1995 /s/ Kevin K. Albert
Kevin K. Albert
Director and President
Dated: May 15, 1995 /s/ Robert F. Aufenanger
Robert F. Aufenanger
Director and Executive Vice President
Dated: May 15, 1995 /s/ David G. Cohen
David G. Cohen
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 March 31, 1995, and is
qualified in its entirety by reference to such
financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,804
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,605
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (1,947)
<TOTAL-LIABILITY-AND-EQUITY> 6,605
<SALES> 0
<TOTAL-REVENUES> 38
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 617
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (615)
<INCOME-TAX> 0
<INCOME-CONTINUING> (615)
<DISCONTINUED> 1,684
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,069
<EPS-PRIMARY> 9.44
<EPS-DILUTED> 0
</TABLE>
