<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-12
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
C/O ENSTAR COMMUNICATIONS CORPORATION
12444 POWERSCOURT DRIVE, SUITE 100
ST. LOUIS, MISSOURI 63131
September 14, 2000
To the Limited Partners of Enstar Income/Growth Program Six-A, L.P.:
The attached report (the "Report") is being provided to you pursuant to
Rule 14a-12 under the Securities Exchange Act of 1934 as "build-up material"
relative to a consent solicitation presently contemplated by Enstar
Communications Corporation ("Enstar Communications"), the general partner of
Enstar Income/Growth Program Six-A, L.P. ("Enstar Six-A").
THE REPORT IS NOT A PROXY STATEMENT OR A CONSENT STATEMENT. ENSTAR
COMMUNICATIONS EXPECTS THAT IT WILL FILE A CONSENT STATEMENT WITH THE SECURITIES
AND EXCHANGE COMMISSION IN THE NEAR FUTURE. WHEN YOU RECEIVE IT, PLEASE READ THE
CONSENT STATEMENT CAREFULLY, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT
ENSTAR COMMUNICATIONS AND THE PROPOSAL IT WILL BE ASKING THE LIMITED PARTNERS TO
APPROVE. THE CONSENT STATEMENT WILL BE MAILED TO THE LIMITED PARTNERS AFTER IT
HAS BEEN FILED IN DEFINITIVE FORM WITH THE SECURITIES AND EXCHANGE COMMISSION.
YOU MAY OBTAIN A FREE COPY OF THE CONSENT STATEMENT, WHEN IT BECOMES
AVAILABLE, AT THE SEC'S WEB SITE AT http://www.sec.gov. A FREE COPY OF THE
ATTACHED REPORT IS ALSO AVAILABLE AT THE SEC'S WEB SITE. YOU MAY ALSO OBTAIN A
FREE COPY OF THE CONSENT STATEMENT (WHEN IT IS AVAILABLE) AND OF THE ATTACHED
REPORT FROM ENSTAR COMMUNICATIONS CORPORATION, 12444 POWERSCOURT DRIVE, SUITE
100, ST. LOUIS, MISSOURI, 63131, ATTENTION: MS. CAROL WOLF, MANAGER OF
PARTNERSHIP RELATIONS; OR CALL MS. WOLF AT (314) 543-2389 OR RALPH KELLY AT
(314) 543-2388.
The participants in the solicitation and their equity interests in
Enstar Income/Growth Program Six-A, L.P. are:
<TABLE>
<CAPTION>
NAME AND ADDRESS CAPACITY OF AMOUNT AND NATURE OF
OF PARTICIPANT PARTICIPANT BENEFICIAL OWNERSHIP
-------------- ----------- --------------------
<S> <C> <C>
1. Enstar Income/Growth Program Registrant Not applicable
Six-A, L.P.
c/o Enstar Communications
Corporation
12444 Powerscourt Drive
Suite 100
St. Louis, Missouri 63131
2. Enstar Communications General Partner 0.5% partnership interest
Corporation
12444 Powerscourt Drive
Suite 100
St. Louis, Missouri 63131
</TABLE>
<PAGE> 3
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
C/O ENSTAR COMMUNICATIONS CORPORATION
12444 POWERSCOURT DRIVE, SUITE 100
ST. LOUIS, MISSOURI 63131
---------
QUARTERLY REPORT
---------
Dear Limited Partner:
As the general partner of Enstar Income/Growth Program Six-A, L.P.,
("Enstar Six-A" or the "Partnership"), we are pleased to enclose the
Partnership's Quarterly Report on Form 10-Q for the three months ended June 30,
2000.
We are further pleased to announce that the Partnership (together with
thirteen other Enstar-affiliated limited and general partnerships) has entered
into two separate and comprehensive Asset Purchase Agreements, one dated as of
June 21, 2000 and the other dated as of August 8, 2000, with Multimedia
Acquisition Corp. (an affiliate of Gans Multimedia Partnership), pursuant to
which Multimedia would purchase substantially all of the cable television
systems and other operating assets of each of those selling partnerships,
including Enstar Six-A, for a combined, aggregate purchase price of
$122,850,900, of which $16,416,157 would be paid to Enstar Six-A, subject to
closing adjustments. Neither Multimedia nor Gans is affiliated with the
Partnership or any affiliate of the Partnership.
The Multimedia agreements are the result of an extensive process we
began in 1999 to engage a respected industry broker, identify prospective
purchasers of the selling partnerships' cable systems and to negotiate
definitive purchase agreements covering all or substantially all of those
assets. Of the bids we received, Multimedia offered the most favorable price and
other terms.
In the case of each purchase agreement, Multimedia's obligation to
purchase the selling partnerships' cable system assets, including Enstar
Six-A's, is contingent on (i) each and every selling partnership obtaining the
approval of its respective limited partners; and (ii) the grantors of the
franchises covering 90% of the selling partnerships' aggregate number of
subscribers consenting to the assignment of those franchises to Multimedia. We
anticipate that this process will require several months.
Following the sales to Multimedia, we would repay the Partnership's
debts, fund required reserves, and terminate the Partnership by making
liquidating cash distributions to its the partners in accordance with the
liquidation provisions of the partnership agreement. We presently expect that
the liquidating distributions to the limited partners would approximate $135 per
Unit (subject to closing adjustments and federal and state taxes).
We presently expect that both sales to Multimedia would close in the
first quarter of 2001 and anticipate making the initial liquidating distribution
approximately 60 days after the closings. We also expect that after required
closing adjustments are completed (which we expect
<PAGE> 4
to occur approximately 6 months after each closing), final liquidating
distributions would be made of any remaining funds.
The liquidating distributions and time-frames contemplated above are
estimates, only. There is no assurance that the sale of the Partnership's assets
will close within the time period indicated, if at all, or that the liquidating
distributions will not differ substantially from those set forth above.
As noted in the cover letter to this Report, at this time we are not
soliciting your consent to or approval of the Multimedia sales and subsequent
liquidation. We will seek your consent only through a formal Consent
Solicitation Statement that we must file with the Securities and Exchange
Commission before we send it to you. We are now in the process of preparing the
Consent Solicitation Statement and at this time expect to send it (together with
appropriate consent cards) to you within the next several weeks. When you
receive our Consent Solicitation Statement, please read it carefully before you
vote, because it will contain important information pertinent to the General
Partner, the Partnership, the Multimedia sales, the reasons for them, the
liquidation and distribution process and voting procedures.
ENSTAR COMMUNICATIONS CORPORATION
General Partner
<PAGE> 5
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM 10-Q
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
-------------------------------
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 0-17687
--------
Enstar Income/Growth Program Six-A, L.P.
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Georgia 58-1755230
--------------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
12444 Powerscourt Dr., Suite 100
St. Louis, Missouri 63131
---------------------------------------- ---------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 965-0555
---------------------------
--------------------------------------------------------------------------------
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
--- ---
Exhibit Index located Page E-1
<PAGE> 6
PART I - FINANCIAL INFORMATION
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
CONDENSED BALANCE SHEETS
==============================================
<TABLE>
<CAPTION>
December 31, June 30,
1999* 2000
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 675,900 $ 749,800
Accounts receivable, net of allowance of doubtful accounts of $2,300
and $10,800, respectively 46,500 89,600
Prepaid expenses and other assets 119,900 76,000
Property, plant and equipment, net of accumulated
depreciation of $6,121,000 and $6,516,000, respectively 2,767,600 3,515,200
Franchise cost, net of accumulated amortization
of $2,871,500 and $2,996,100, respectively 722,900 623,300
Deferred loan costs and other deferred charges, net 32,600 30,100
----------- -----------
$ 4,365,400 $ 5,084,000
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL
LIABILITIES:
Accounts payable $ 260,800 $ 337,200
Due to affiliates 380,900 919,200
Note payable - affiliate 1,050,000 1,050,000
----------- -----------
1,691,700 2,306,400
----------- -----------
PARTNERSHIP CAPITAL (DEFICIT):
General Partner (135,900) (134,900)
Limited Partners 2,809,600 2,912,500
----------- -----------
TOTAL PARTNERSHIP CAPITAL 2,673,700 2,777,600
----------- -----------
$ 4,365,400 $ 5,084,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
--------
*Agrees with audited balance sheet included in the Partnership's Annual Report
on Form 10-K
-2-
<PAGE> 7
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
CONDENSED STATEMENTS OF OPERATIONS
=========================================
<TABLE>
<CAPTION>
Unaudited
---------------------------
Three months ended
June 30,
---------------------------
1999 2000
--------- ---------
<S> <C> <C>
REVENUES $ 869,000 $ 837,100
--------- ---------
OPERATING EXPENSES:
Service costs 283,300 217,600
General and administrative expenses 153,200 105,300
General partner management fees
and reimbursed expenses 132,000 125,800
Depreciation and amortization 258,600 289,000
--------- ---------
827,100 737,700
--------- ---------
OPERATING INCOME 41,900 99,400
--------- ---------
OTHER INCOME (EXPENSE):
Interest income 5,300 9,000
Interest expense (38,100) (33,600)
--------- ---------
(32,800) (24,600)
--------- ---------
NET INCOME $ 9,100 $ 74,800
========= =========
Net income allocated to General Partner $ 100 $ 700
========= =========
Net income allocated to Limited Partners $ 9,000 $ 74,100
========= =========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 0.11 $ .93
========= =========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 79,818 79,818
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
-3-
<PAGE> 8
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
CONDENSED STATEMENTS OF OPERATIONS
===========================================
<TABLE>
<CAPTION>
Unaudited
-----------------------------
Six months ended
June 30,
-----------------------------
1999 2000
----------- ------------
<S> <C> <C>
REVENUES $ 1,736,600 $ 1,674,300
----------- ------------
OPERATING EXPENSES:
Service costs 592,500 480,200
General and administrative expenses 277,500 234,000
General partner management fees
and reimbursed expenses 262,000 254,800
Depreciation and amortization 515,800 549,700
----------- -----------
1,647,800 1,518,700
----------- -----------
OPERATING INCOME 88,800 155,600
----------- -----------
OTHER INCOME (EXPENSE):
Interest income 11,300 16,600
Interest expense (75,300) (68,300)
----------- -----------
(64,000) (51,700)
----------- -----------
NET INCOME $ 24,800 $ 103,900
=========== ===========
Net income allocated to General Partner $ 200 $ 1,000
=========== ===========
Net income allocated to Limited Partners $ 24,600 $ 102,900
=========== ===========
NET INCOME PER UNIT OF LIMITED
PARTNERSHIP INTEREST $ 0.31 $ 1.29
=========== ===========
AVERAGE LIMITED PARTNERSHIP
UNITS OUTSTANDING DURING PERIOD 79,818 79,818
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
-4-
<PAGE> 9
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
CONDENSED STATEMENTS OF CASH FLOWS
==========================================
<TABLE>
<CAPTION>
Unaudited
------------------------------
Six months ended
June 30,
------------------------------
1999 2000
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 24,800 $ 103,900
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 515,800 549,700
Amortization of deferred loan costs 8,400 8,600
Changes in:
Accounts receivable, prepaid expenses and other assets (144,000) 800
Accounts payable and due to affiliates 28,500 614,700
----------- -----------
Net cash from operating activities 433,500 1,277,700
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (120,600) (1,172,000)
Increase in intangible assets (27,800) (25,000)
----------- -----------
Net cash from investing activities (148,400) (1,197,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred loan costs -- (6,800)
----------- -----------
Net cash from financing activities -- (6,800)
----------- -----------
INCREASE IN CASH 285,100 73,900
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 542,000 675,900
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 827,100 $ 749,800
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
-5-
<PAGE> 10
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
==========================================
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for
the Enstar Income/Growth Program Six-A, L.P. (the "Partnership"), as of June 30,
2000 and for the three and six months ended June 30, 2000 and 1999 are
unaudited. These condensed interim financial statements should be read in
conjunction with the audited financial statements and notes thereto included in
our latest Annual Report on Form 10-K. In the opinion of management, the
condensed interim financial statements reflect all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
results of such periods. The results of operations for the three and six months
ended June 30, 2000 are not necessarily indicative of results for the entire
year.
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
The Partnership has a management and service agreement (the
"Management Agreement") with Enstar Cable Corporation (the "Manager"), a wholly
owned subsidiary of Enstar Communications Corporation (ECC), the corporate
general partner, for a monthly management fee of 5% of gross revenues to the
Manager, excluding revenues from the sale of cable television systems or
franchises. The Partnership's management fee expense approximated $41,900 and
$83,700 for the three and six months ended June 30, 2000, respectively. For the
three and six months ended June 30, 1999, the Partnership's management fee
expense approximated $43,400 and $86,800, respectively. Management fees are
non-interest bearing.
In addition to the monthly management fee, the Partnership
reimburses the manager for direct expenses incurred on behalf of the
Partnership, and for the Partnership's allocable share of operational costs
associated with services provided by the Manager. Additionally, Charter
Communications Holding Company, LLC and its affiliates (collectively, "Charter")
provide other management and operational services for the Partnership. Such
services were provided by Falcon Communications, L.P. and its affiliates
(collectively, "Falcon") prior to November 12, 1999. These expenses are charged
to the properties served based primarily on the Partnership's allocable share of
operational costs associated with services provided. The total amount charged to
the Partnership for these services approximated $83,900 and $171,100 for the
three and six months ended June 30, 2000, respectively. For the three and six
months ended June 30, 1999, the total amount charged to the Partnership for
these services approximated $88,600 and $175,200, respectively.
Substantially all programming services have been purchased
through Charter since November 12, 1999. Before that time, substantially all
programming services were purchased through Falcon. Falcon charged the
Partnership for these costs based on an estimate of what ECC could negotiate for
such programming services for the 15 partnerships managed as a group. Charter
charges the Partnership for these costs based on its costs. The Partnership
recorded programming fee expense of $147,600 and $311,500 for the three and six
months ended June 30, 2000, respectively.
-6-
<PAGE> 11
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS - (CONTINUED)
==========================================
For the three and six months ended June 30, 1999, the
Partnership recorded programming fee expense of $205,400 and $407,800,
respectively. Programming fees are included in service costs in the statements
of operations.
On September 30, 1997, ECC contributed a $269,300 receivable
balance from the Partnership for past due management fees and reimbursed
expenses as an equity contribution to its subsidiary, Enstar Finance Company,
LLC. This balance remains an outstanding obligation of the Partnership. In the
normal course of business, the Partnership pays interest and principal to Enstar
Finance Company, LLC, the Partnership's primary lender, as well as a commitment
fee on the unborrowed portion of the facility.
3. NET INCOME PER UNIT OF LIMITED PARTNERSHIP INTEREST
Net income per unit of limited partnership interest is based
on the average number of units outstanding during the periods presented. For
this purpose, net income has been allocated 99% to the Limited Partner and 1% to
the General Partner. The General Partner does not own units of partnership
interest in the Partnership, but rather holds a participation interest in the
income, losses and distributions of the Partnership.
4. SALE OF CABLE SYSTEM
On June 21, 2000, the Partnership, together with certain
affiliates, (collectively, the "Sellers") entered into a purchase and sale
agreement (the "Gans I Agreement") with Multimedia Acquisition Corp., an
affiliate of Gans Multimedia Partnership, (the "Purchaser"). The Gans I
Agreement provides for the Purchaser to acquire the assets comprising the
Partnership's cable system serving Dyer, Tennessee, as well as certain assets of
other affiliates.
The aggregate purchase price payable to the Sellers pursuant
to the Gans I Agreement is $27,621,500 in cash (subject to normal closing
adjustments). Of that amount, $3,972,157 (subject to closing adjustments) is
payable to the Partnership. The allocation of the purchase price among each of
the Sellers was assigned by the Purchaser for each of the systems.
The Purchaser's obligation to acquire the cable systems is
subject to numerous closing conditions, including without limitation: (a)
receipt of the necessary governmental consents to transfer franchises covering
an aggregate of 90% of the subscribers of all of the Sellers; (b) receipt of
certain other material consents and approvals required for the consummation of
the sale; (c) receipt of the necessary approvals of the Limited Partners of each
Seller; and (d) other standard closing conditions. With respect to clause (c)
above, completion of the transaction is contingent on the Limited Partners of
the Partnership and the other selling affiliates voting to approve the sale.
-7-
<PAGE> 12
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS - (CONTINUED)
==========================================
5. SUBSEQUENT EVENT
On August 8, 2000, the Partnership, together with certain
affiliates, (collectively, the "Selling Affiliates") entered into a purchase and
sale agreement (the "Gans II Agreement") with Multimedia Acquisition Corp., an
affiliate of Gans Multimedia Partnership, (the "Buyer"). The Gans II Agreement
provides for the Buyer to acquire the assets comprising the Partnership's cable
system serving Flora, Illinois, as well as certain assets of other affiliates.
The aggregate purchase price payable to the Selling Affiliates
pursuant to the Gans II Agreement is $94,929,400 in cash (subject to normal
closing adjustments). Of that amount, $12,444,000 (subject to closing
adjustments) is payable to the Partnership. The allocation of the purchase price
among each of the Selling Affiliates was assigned by the Buyer for each of the
systems.
The Buyer's obligation to acquire the cable systems is subject
to numerous closing conditions, including without limitation: (a) receipt of the
necessary governmental consents to transfer franchises covering an aggregate of
90% of the subscribers of all of the Selling Affiliates; (b) receipt of certain
other material consents and approvals required for the consummation of the sale;
(c) receipt of the necessary approvals of the Limited Partners of each Selling
Affiliate; and (d) other standard closing conditions. With respect to clause (c)
above, completion of the transaction is contingent on the Limited Partners of
the Partnership and the other selling affiliates voting to approve the sale.
-8-
<PAGE> 13
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
This report includes certain forward-looking statements
regarding, among other things, our future results of operations, regulatory
requirements, competition, capital needs and general business conditions
applicable to the Partnership. Such forward-looking statements involve risks and
uncertainties including, without limitation, the uncertainty of legislative and
regulatory changes and the rapid developments in the competitive environment
facing cable television operators such as the Partnership. In addition to the
information provided here, reference is made to our Annual Report on Form 10-K
for the year ended December 31, 1999 for additional information regarding such
matters and the effect thereof on our business.
RESULTS OF OPERATIONS
Revenues decreased from $869,000 to $837,100, or by 3.7%, and
from $1,736,600 to $1,674,300, or by 3.6%, for the three and six months ended
June 30, 2000, as compared to the corresponding periods in 1999. Of the $31,900
decrease for the three months ended June 30, 2000, approximately $64,400 was due
to decreases in the number of subscribers for basic, premium, tier and equipment
rental services and $6,600 was due to decreases in other revenue producing
items. These decreases were partially offset by a $39,100 increase due to
increases in regulated service rates that we implemented in 2000. Of the $62,300
decrease in revenues for the six months ended June 30 2000, $123,600 was due to
decreases in the number of subscribers for basic, premium, tier and equipment
rental services, and $5,600 was due to decreases in other revenue producing
items. These decreases were partially offset by a $66,900 increase due to
increases in regulated service rates that we implemented in 2000. As of June 30,
2000, we had approximately 8,300 basic subscribers and 1,500 premium service
units.
Service costs decreased from $283,300 to $217,600, or by
23.2%, and from $592,500 to $480,200, or by 19.0%, for the three and six months
ended June 30, 2000, as compared to the corresponding periods in 1999. Service
costs represent costs directly attributable to providing cable services to
customers. The decrease was primarily due to lower programming fees resulting
from lower rates that Charter has extended to us and a decrease in subscribers.
General and administrative expenses decreased from $153,200 to
$105,300, or by 31.3%, and from $277,500 to $234,000, or by 15.7%, for the three
and six months ended June 30, 2000, as compared to the corresponding periods in
1999. The decrease was primarily due to decreases in marketing and communication
expenses.
General partner management fees and reimbursed expenses
decreased from $132,000 to $125,800, or by 4.7%, and from $262,000 to $254,800,
or by 2.7%, for the three and six months ended June 30, 2000, as compared to the
corresponding periods in 1999, due to a decrease in management fees from the
decrease in revenue, as discussed above. In addition, the decrease was due to
lower accounting reimbursed expenses as a result of lower rates allocated by
Charter.
-9-
<PAGE> 14
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
Depreciation and amortization expense increased from $258,600
to $289,000, or by 11.8%, and from $515,800 to $549,700, or by 6.6%, for the
three and six months ended June 30, 2000, as compared to the corresponding
periods in 1999, due to the additional depreciation related to plant asset
additions.
Operating income increased from $41,900 to $99,400, or 137.2%,
and from $88,800 to $155,600, or by 75.2%, for the three and six months ended
June 30, 2000, as compared to the corresponding periods in 1999, primarily due
to factors described above.
Interest income increased from $5,300 to $9,000, or by 69.8%,
and from $11,300 to $16,600, or by 46.9%, for the three and six months ended
June 30, 2000, as compared to the corresponding periods in 1999, primarily due
to higher average cash balances available for investment and due to higher
average interest rates earned during 2000.
Interest expense decreased from $38,100 to $33,600, or by
11.8%, and from $75,300 to $68,300, or by 9.3%, for the three and six months
ended June 30, 2000, as compared to the corresponding periods in 1999, primarily
due to lower average outstanding borrowings in the first quarter of 2000.
Due to the factors described above, our net income increased
from $9,100 to $74,800, or by 722.0%, and from $24,800 to $103,900, or by
319.0%, for the three and six months ended June 30, 2000, as compared to the
corresponding periods in 1999.
Based on our experience in the cable television industry, we
believe that operating income before depreciation and amortization, or EBITDA,
and related measures of cash flow serve as important financial analysis tools
for measuring and comparing cable television companies in several areas, such as
liquidity, operating performance and leverage. EBITDA is not a measurement
determined under generally accepted accounting principles (GAAP) and does not
represent cash generated from operating activities in accordance with GAAP.
EBITDA should not be considered by the reader as an alternative to net income,
as an indicator of financial performance or as an alternative to cash flows as a
measure of liquidity. In addition, the definition of EBITDA may not be identical
to similarly titled measures used by other companies. EBITDA as a percentage of
revenues increased from 34.6% to 46.4% and 34.8% to 42.1% during the three and
six months ended June 30, 2000, as compared to the corresponding period in 1999.
The increase was primarily caused by lower programming fees and other factors as
described above. EBITDA increased from $300,500 to $388,400, or by 29.3%, and
from $604,600 to $705,300, or by 16.7%, for the three and six months ended June
30, 2000, as compared to the corresponding periods in 1999.
LIQUIDITY AND CAPITAL RESOURCES
Our primary objective is to distribute to our partners all
available cash flow from operations and proceeds from the sale of cable systems,
if any, after providing for expenses, debt service and capital requirements
relating to the expansion, improvement and upgrade of our existing cable
systems.
In accordance with the Agreement, Enstar Communications
Corporation (ECC) has implemented a plan for liquidating the Partnership. On
June 21, 2000, the Partnership, together with
-10-
<PAGE> 15
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
certain affiliates, (collectively, the "Sellers") entered into a purchase and
sale agreement (the "Gans I Agreement") with Multimedia Acquisition Corp., an
affiliate of Gans Multimedia Partnership, (the "Purchaser"). The Gans I
Agreement provides for the Purchaser to acquire the assets comprising the
Partnership's cable system serving Dyer, Tennessee, as well as certain assets of
other affiliates. The aggregate purchase price payable to the Sellers pursuant
to the Gans I Agreement is $27,621,500 in cash (subject to normal closing
adjustments). Of that amount, $3,972,157 (subject to closing adjustments) is
payable to the Partnership. The allocation of the purchase price among each of
the Sellers was assigned by the Purchaser for each of the systems.
On August 8, 2000, the Partnership, together with certain
affiliates, (collectively, the "Selling Affiliates") entered into a purchase and
sale agreement (the "Gans II Agreement") with Multimedia Acquisition Corp., an
affiliate of Gans Multimedia Partnership, (the "Buyer"). The Gans II Agreement
provides for the Buyer to acquire the assets comprising the Partnership's cable
system serving Flora, Illinois, as well as certain assets of other affiliates.
The aggregate purchase price payable to the Selling Affiliates pursuant to the
Gans II Agreement is $94,929,400 in cash (subject to normal closing
adjustments). Of that amount, $12,444,000 (subject to closing adjustments) is
payable to the Partnership. The allocation of the purchase price among each of
the Selling Affiliates was assigned by the Buyer for each of the systems.
Both of these purchase and sale agreements are subject to
numerous closing conditions, including without limitation: (a) receipt of the
necessary governmental consents to transfer franchises covering an aggregate of
90% of the subscribers to be sold; (b) receipt of certain other material
consents and approvals required for the consummation of the sale; (c) receipt of
the necessary approvals of the Limited Partners; and (d) other standard closing
conditions. With respect to clause (c) above, completion of the transaction is
contingent on the Limited Partners of the Partnership and the other selling
affiliates voting to approve the sale.
Two of the Partnership's franchise areas, which together serve
63% of the Partnership's total customer base, require upgrades to increase
channel capacity. One of the upgrades is required in an existing franchise
agreement. The estimated cost to upgrade the cable system in this franchise area
is approximately $2.5 million and must be completed by October 15, 2000. The
Partnership has petitioned for a six-month extension of the completion date and
expects approval of the extension. Another of the Partnership's franchise
agreements is under negotiation for renewal and the Partnership believes that
the renewed franchise agreement may require the Partnership to upgrade its cable
plant at an estimated cost of $1.5 million within 24 months. The full upgrade
program is estimated to require aggregate capital expenditures of approximately
$4.0 million. In addition to the required upgrade described above, capital
expenditures budgeted for 2000 are $802,700 for the replacement of other assets
and to extend the Partnership's cable plant into new service areas. As of June
30, 2000 capital spending approximated $1,172,000, which included expenditures
related to the upgrade.
We are party to a loan agreement with Enstar Finance Company,
LLC, a subsidiary of ECC. The loan agreement provides for a revolving loan
facility of $3.6 million. Total outstanding borrowings were $1,050,000 at June
30, 2000 and 1999. We pay a commitment fee of 0.5% to Enstar Finance Company,
LLC, on the unborrowed portion of the facility. We expect to increase borrowings
under the facility in the future to fund the upgrade of our systems. However,
borrowing
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ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
capacity and our present cash reserves will be insufficient to fund
our entire upgrade program. Consequently, if our systems are not sold, we will
need to rely on increased cash flow from operations or new sources of financing
in order to meet our future liquidity requirements. There can be no assurance
that such cash flow increases can be attained, or that additional future
financing will be available to us on acceptable terms. If we are not able to
attain such cash flow increases, or obtain new sources of borrowings, we will
not be able to complete our full upgrade program. As a result, the value of our
systems will be lower than that of systems rebuilt to a higher technical
standard.
Our loan facility matures on August 31, 2001, at which time
all amounts then outstanding are due in full. Borrowings bear interest at the
lender's base rate (9.135% at June 30, 2000) plus 0.625%, or at an offshore rate
(6.27% at June 30, 2000) plus 1.875%. Under certain circumstances, we are
required to make mandatory prepayments, which permanently reduce the maximum
commitment under the loan facility. The loan facility contains certain financial
tests and other covenants including, among others, restrictions on incurrence of
indebtedness, investments, sales of assets, acquisitions and other covenants,
defaults and conditions. We believe that we are in compliance with the covenants
at June 30, 2000. The loan facility does not restrict the payment of
distributions to partners unless an event of default exists thereunder or our
ratio of debt to cash flow is greater than 4 to 1. However, due to the upgrade
program discussed above, the corporate general partner believes it is critical
to conserve cash and borrowing capacity and, consequently, has concluded that it
would not be prudent for the partnership to resume paying distributions at this
time.
ECC contributed its $269,300 receivable balance from us for
past due general partner management fees and reimbursed expenses as an equity
contribution to Enstar Finance Company, LLC. This balance remains an outstanding
obligation of ours.
Falcon purchased insurance coverage for all of the cable
television properties owned or managed by it to cover damage to cable
distribution plant and subscriber connections and against business interruptions
resulting from such damage. This coverage is subject to a significant annual
deductible which applies to all of the cable television properties formerly
owned or managed by Falcon Communications through November 12, 1999, and
currently managed by Charter, including those of the Partnership.
Approximately 73% of our subscribers are served by our system
in Flora, Illinois and neighboring communities. Significant damage to the system
due to seasonal weather conditions or other events could have a material adverse
effect on our liquidity and cash flows. We continue to purchase insurance
coverage in amounts our management views as appropriate for all other property,
liability, automobile, workers' compensation and other types of insurable risks.
Operating activities provided $844,200 more cash in the six
months ended June 30, 2000 than in the corresponding period in 1999. Changes in
receivables and prepaid expenses provided $144,800 more cash in the first six
months of 2000 than in the comparable 1999 period due to differences in the
timing of receivable collections and the payment of prepaid expenses. We used
$586,200 more cash to pay liabilities owed to affiliates and third party
creditors during the six months ended June 30, 2000 due to differences in the
timing of payments.
We used $1,048,600 more cash in investing activities during
the six months ended June 30, 2000 than in the comparable six months of 1999 due
to an increase of $1,051,400 in
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ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
expenditures for tangible assets and a decrease of $2,800 in expenditures for
intangible assets. We used $6,800 more cash in financing activities during the
six months ended June 30, 2000 than in the corresponding period of 1999 for the
payment of deferred loan costs related to our loan facility.
INFLATION
Certain of our expenses, such as those for wages and benefits,
equipment repair and replacement, and billing and marketing generally increase
with inflation. However, we do not believe that our financial results have been,
or will be, adversely affected by inflation in a material way, provided that we
are able to increase our service rates periodically, of which there can be no
assurance.
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ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
PART II. OTHER INFORMATION
ITEMS 1-5. Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Asset Purchase Agreement dated June 21, 2000, by
and among Multimedia Acquisition Corp., as
Buyer, and Enstar Income Program 1984-1, L.P.,
Enstar Income Program IV-3, L.P., Enstar
Income/Growth Program Six-A, L.P., Enstar VII,
Enstar VIII and Enstar X, Ltd., as Sellers. (1)
10.2 Asset Purchase Agreement, dated August 8, 2000,
by and among Multimedia Acquisition Corp., as
Buyer, and Enstar Income Program II-1, L.P.,
Enstar Income Program II-2, L.P., Enstar Income
Program IV-1, L.P., Enstar Income Program IV-2,
L.P., Enstar Income Program IV-3, L.P., Enstar
Income/Growth Program Five-A, L.P., Enstar
Income/Growth Program Five-B, L.P., Enstar
Income/Growth Program Six-A, L.P., Enstar IX and
Enstar XI, Ltd., as Sellers. (2)
27.1 Financial Data Schedule.*
(b) Reports on Form 8-K
- On June 30, 2000, an 8-K dated June 21, 2000,
was filed to announce an Asset Purchase
Agreement dated June 21, 2000, by and among
Multimedia Acquisition Corp., as Buyer, and
Enstar Income Program 1984-1, L.P., Enstar
Income Program IV-3, L.P., Enstar Income/Growth
Program Six-A, L.P., Enstar VII, Enstar VIII and
Enstar X, Ltd., as Sellers (Item 5).
- On July 18, 2000, an 8-K dated July 14, 2000,
was filed to announce a change in the
Partnership's principal independent accountants
(Item 4).
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* Filed herewith.
(1) Incorporated by reference to the Current Report on Form 8-K of Enstar
Income 1984-1, L.P. filed on June 30, 2000 (File No. 000-13333).
(2) Incorporated by reference to the Current Report on Form 10-Q of Enstar
Income Program II-1, L.P., filed with the Commission on or about August
14, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.
a GEORGIA LIMITED PARTNERSHIP
-----------------------------
(Registrant)
By: ENSTAR COMMUNICATIONS CORPORATION
General Partner
Date: August 14, 2000 By: /s/ Kent D. Kalkwarf
---------------------
Kent D. Kalkwarf
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
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