Filed pursuant to Rule 424(b)(3)
Registration Nos. 33-67390 and
33-67390-01
MARCUS CABLE COMPANY, L.P.
MARCUS CABLE CAPITAL CORPORATION
Supplement to Prospectus
Dated April 16, 1997, as supplemented by
Prospectus Supplement Dated May 15, 1997
The date of this Supplement is August 14, 1997
On August 14, 1997, Marcus Cable Company, L.P. filed the attached Quarterly
Report on Form 10-Q for the period ended June 30, 1997.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1997
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
COMMISSION FILE NUMBERS 33-67390; 33-67390-01; 33-81088;
33-81088-01; 33-81088-02; 33-93808; 33-93808-01
MARCUS CABLE COMPANY, L.P.
MARCUS CABLE OPERATING COMPANY, L.P.
MARCUS CABLE CAPITAL CORPORATION
MARCUS CABLE CAPITAL CORPORATION II
MARCUS CABLE CAPITAL CORPORATION III
(Exact name of registrants as specified in their charters)
DELAWARE 75-2337471
DELAWARE 75-2495706
DELAWARE 75-2546077
DELAWARE 75-2546713
DELAWARE 75-2599586
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2911 TURTLE CREEK BOULEVARD, SUITE 1300
DALLAS, TEXAS 75219-6257
(Address of principal executive offices) (Zip Code)
(214) 521-7898
(Registrants' telephone number, including area code)
Indicate by check mark whether the registrants (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
There is no established trading market for any of the registrants' voting
securities. As of the date of this report, there were 1,000 shares of common
stock of Marcus Cable Capital Corporation and 1,000 shares of common stock of
Marcus Cable Capital Corporation III outstanding, all of which are owned by
Marcus Cable Company, L.P., and 1,000 shares of common stock of Marcus Cable
Capital Corporation II outstanding, all of which are owned by Marcus Cable
Operating Company, L.P.
<PAGE>
MARCUS CABLE COMPANY, L.P.
MARCUS CABLE OPERATING COMPANY, L.P.
MARCUS CABLE CAPITAL CORPORATION
MARCUS CABLE CAPITAL CORPORATION II
MARCUS CABLE CAPITAL CORPORATION III
<TABLE>
INDEX TO QUARTERLY REPORT FORM 10-Q
JUNE 30, 1997
<CAPTION>
Page No.
<S> <C> <C>
Definitions 3-4
PART I FINANCIAL INFORMATION
Item 1: Financial Statements - Marcus Cable Company, L.P. and
Subsidiaries
Consolidated Balance Sheets as of
June 30, 1997 and December 31, 1996 5
Consolidated Statements of Operations
for the Three and Six months Ended June 30, 1997
and 1996 6
Consolidated Statements of Cash Flows
for the Six months Ended June 30, 1997 and 1996 7
Notes to the Consolidated Financial Statements 8-12
Consolidating Schedules 13-14
</TABLE>
Separate financial statements of Operating as issuer of the 13 1/2%
Notes have not been presented, as the aggregate net assets, earnings
and partners' capital of Operating are substantially equivalent to
the net assets, earnings and partners' capital of the Company on a
consolidated basis. Additionally, separate financial statements of
Capital, Capital II and Capital III have not been presented because
these entities have no operations and substantially no assets or
equity.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward looking statements. Certain information
included in this Form 10-Q contains statements that are forward
looking, such as statements relating to the effects of future
regulation, future capital commitments and future acquisitions.
Such forward-looking information involves important risks and
uncertainties that could significantly affect expected results in
the future from those expressed in any forward-looking statements
made by, or on behalf of the Company. These risks and uncertainties
include, but are not limited to, uncertainties relating to economic
conditions, acquisitions and divestitures, government and regulatory
policies, the pricing and availability of equipment, materials,
inventories and programming, technological developments and changes
in the competitive environment in which the Company operates.
Investors are cautioned that all forward-looking statements involve
risks and uncertainties.
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 15-23
PART II OTHER INFORMATION
Item 1: Legal Proceedings 24
Item 2: Changes in Securities 24
Item 3: Defaults Upon Senior Securities 24
Item 4: Submission of Matters to a Vote of Security Holders 24
Item 5: Other Information 24
Item 6: Exhibits and Reports on Form 8-K 24
</TABLE>
2
<PAGE>
<TABLE>
DEFINITIONS
When used herein, the following terms will have the meaning
indicated.
<CAPTION>
Term Definition
<S> <C>
11 7/8% Debentures 11 7/8%Senior Debentures, due
October 1, 2005, which are
obligations of MCC and Capital
13 1/2% Notes 13 1/2% Senior Subordinated
Guaranteed Discount Notes, due
August 1, 2004, which are
obligations of Operating and
Capital II that are guaranteed by
MCC
14 1/4% Notes 14 1/4% Senior Discount Notes, due
December 15, 2005, which are
obligations of MCC and Capital III
1992 Cable Act Cable Television Consumer
Protection and Competition Act of
1992
1996 Telecom Act Telecommunications Act of 1996
Capital Marcus Cable Capital Corporation
Capital II Marcus Cable Capital Corporation II
Capital III Marcus Cable Capital Corporation
III
Company Marcus Cable Company, L.P. and
subsidiaries
CPST Cable Programming Service Tier
EBITDA Earnings Before Interest, Taxes,
Depreciation and Amortization
FCC Federal Communications Commission
Harron Harron Communications, Corp. and
certain of its subsidiaries
Harron Systems Certain cable television systems
purchased from Harron
Goldman Sachs Goldman, Sachs & Co.
LIBOR London InterBank Offered Rate
Maryland Cable Maryland Cable Partners, L.P.
Maryland Cable Agreement The management agreement between
Operating and Maryland Cable
Maryland Cable System Cable system owned by Maryland
Cable
MCC Marcus Cable Company, L.P. and
subsidiaries
MCA Marcus Cable Associates, L.P.
MCALP Marcus Cable of Alabama, L.P.
MCDM Marcus Cable of Delaware and
Maryland, L.P.
MCP Marcus Cable Partners, L.P.
Operating Marcus Cable Operating Company,
L.P.
Operating Partnerships MCA, MCALP, MCDM and MCP
Sammons Sammons Communications, Inc. and
certain of its subsidiaries
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Sammons Systems Certain cable television systems
purchased from Sammons
Senior Credit Facility $1,150,000,000 Credit Agreement
among Operating, MCC, Banque
Paribas, Chase Manhattan Bank,
Citibank, N.A., The First National
Bank of Boston, Goldman Sachs,
Union Bank and certain other
lenders referred to therein, dated
as of August 31, 1995, as amended
SFAS Statement of Financial Accounting
Standard
Systems Cable television systems owned by
the Company
Time Warner Time Warner Entertainment Company,
L.P. and certain of its
subsidiaries
Time Warner Systems Certain cable television systems
received in trade with Time Warner
</TABLE>
4
<PAGE>
<TABLE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
<CAPTION>
June 30, December 31,
Assets 1997 1996
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,045 $ 6,034
Accounts receivable, net
of allowance of $1,935 and
$1,900, respectively 19,599 17,043
Prepaid expenses and other 3,741 2,432
----------- -----------
Total current assets 28,385 25,509
Property and equipment, net (note 2) 623,398 578,507
Other assets, net (note 3) 1,037,113 1,083,534
----------- -----------
$ 1,688,896 $ 1,687,550
=========== ===========
Liabilities and Partners' Capital
Current liabilities:
Current maturities of
long-term debt (note 4) $ 74,388 $ 41,819
Accrued liabilities 53,562 49,405
Accrued interest 10,589 10,664
----------- -----------
Total current liabilities 138,539 101,888
Long-term debt (note 4) 1,412,695 1,396,652
Subsidiary limited partner interests (246) (246)
Partners' capital 137,908 189,256
Commitments and contingencies --- ---
----------- -----------
$ 1,688,896 $ 1,687,550
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE>
<TABLE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
(in thousands)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Cable services $115,283 $106,424 $225,352 $208,573
Management
fees (note 5) 1,086 579 5,464 1,146
-------- -------- -------- --------
Total revenues 116,369 107,003 230,816 209,719
-------- -------- -------- --------
Operating expenses:
Selling, service
and system
management 43,413 39,285 84,845 78,350
General and
administrative 17,300 17,963 34,798 35,754
Depreciation and
amortization 45,028 39,806 89,174 78,899
-------- -------- -------- --------
105,741 97,054 208,817 193,003
-------- -------- -------- --------
Operating income 10,628 9,949 21,999 16,716
-------- -------- -------- --------
Other expenses:
Interest
expense, net 36,799 35,680 73,347 71,466
-------- -------- -------- --------
Net loss $(26,171) $(25,731) $(51,348) $(54,750)
======== ======== ======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
6
<PAGE>
<TABLE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
<CAPTION>
Six months ended
June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (51,348) $ (54,750)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 89,174 78,899
Amortization of debt issuance costs 1,942 1,608
Accretion of discount on notes 33,241 29,023
Changes in assets and liabilities,
net of effects of acquisitions:
Accounts receivable (2,556) 4,443
Prepaid expenses (1,309) (1,213)
Other assets (47) (79)
Accrued interest (75) (1,563)
Accrued liabilities 4,157 (5,327)
---------- ----------
Net cash provided by
operating activities 73,179 51,041
---------- ----------
Cash flows from investing activities:
Acquisitions of cable systems and
franchises, net of cash acquired --- (876)
Additions to property and equipment (87,463) (43,346)
---------- ----------
Net cash used in
investing activities (87,463) (44,222)
---------- ----------
Cash flows from financing activities:
Proceeds from note payable --- 10,000
Proceeds from borrowings 105,000 ---
Repayment of long-term debt (90,054) (15,000)
Payment of debt issuance costs (1,392) ---
Payment of capital lease obligations (259) (176)
---------- ----------
Net cash provided by (used in)
financing activities 13,295 (5,176)
---------- ----------
Net increase (decrease) in cash
and cash equivalents (989) 1,643
Cash and cash equivalents at
beginning of period 6,034 17,409
---------- ---------
Cash and cash equivalents at
end of period $ 5,045 $ 19,052
========== =========
Supplemental disclosure of cash
flow information:
Interest paid $ 38,131 $ 42,577
========== ========
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(1) Summary of Significant Accounting Policies
(a) General
MCC is a Delaware limited partnership formed on January
17, 1990 for the purpose of acquiring, operating and
developing cable television systems. MCC derives its
primary source of revenues by providing various levels of
cable television programming and services to residential
and business customers. MCC's operations are conducted
through Operating, an operating holding company in which
MCC serves as a general partner and in which MCC owns a
greater than 99.00% interest. Operating, in turn,
conducts its operations through the Operating
Partnerships, in which it, directly or indirectly, serves
as the general partner and owns a greater than 99.00%
interest.
(b) Basis of Presentation
The consolidated financial statements include the
accounts of MCC, Capital, Capital II, Capital III,
Operating and the Operating Partnerships. All
significant intercompany accounts and transactions have
been eliminated in consolidation.
(c) Franchise Fees
Local governmental authorities impose franchise fees on
the Systems ranging up to a federally mandated maximum of
5.0% of gross revenues. On a monthly basis, such fees
are collected from the Systems' customers. Historically,
franchise fees in certain of the Systems (i.e., the
former Sammons Systems) were not separately itemized on
customers' bills. Such fees were considered part of the
monthly charge for basic services and equipment, and
therefore were reported as revenue and expense in the
Company's financial results. The Company began the
process of itemizing such fees on all customers' bills to
conform with the collection of, and accounting for,
franchise fees in the remaining Systems in November 1996
and completed the process during the first quarter of
1997. As a result, such fees are no longer included as
revenue nor general and administrative expenses. The net
accounting effect of this change is a quarterly reduction
in revenue of approximately $1,700,000 and a
corresponding reduction in general and administrative
expenses, versus the comparable period in 1996.
(d) Interim Financial Information
In the opinion of management, the accompanying unaudited
interim consolidated financial information of the Company
contains all adjustments, consisting only of those of a
recurring nature, necessary to present fairly (i) the
Company's financial position as of June 30, 1997, (ii)
the results of its operations for the three and six
months ended June 30, 1997 and 1996 and (iii) its cash
flows for the six months
8
<PAGE>
ended June 30, 1997 and 1996. These financial statements are for
interim periods and do not include all of the detail normally provided
in annual financial statements and should be read in conjunction
with the consolidated financial statements of the Company
for the year ended December 31, 1996, included in the
Company's Annual Report on Form 10-K.
(2) Property and Equipment
Property and equipment consists of the following (in
thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
Cable and Electronics $ 452,413 $ 440,513
Other 345,827 269,580
----------- -----------
798,270 710,093
Accumulated Depreciation (174,842) (131,586)
----------- -----------
$ 623,398 $ 578,507
=========== ===========
</TABLE>
(3) Other Assets
Other assets consist of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
Franchise rights $ 1,175,019 $ 1,175,009
Going concern value of
acquired cable systems 45,969 45,969
Noncompetition agreements 31,914 31,914
Debt issuance costs 44,892 43,500
Other 1,106 1,069
----------- -----------
1,298,900 1,297,461
Accumulated amortization (261,787) (213,927)
----------- -----------
$ 1,037,113 $ 1,083,534
=========== ===========
</TABLE>
9
<PAGE>
(4) Long-term Debt
The Company had outstanding borrowings under long-term debt
arrangements as follows (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
<S> <C> <C>
Senior Credit Facility $ 870,000 $ 855,000
13 1/2% Senior Subordinated
Discount Notes, due
August 1, 2004 315,040 295,119
14 1/4% Senior Discount Notes,
Due December 15, 2004 199,182 185,862
11 7/8% Senior Debentures, due
October 1, 2005 100,000 100,000
Note Payable 233 287
Capital leases 2,628 2,203
----------- -----------
1,487,083 1,438,471
Less current maturities (74,388) (41,819)
----------- -----------
$ 1,412,695 $ 1,396,652
=========== ===========
</TABLE>
Amounts outstanding under the Senior Credit Facility bear
interest at either the (i) Eurodollar rate, (ii) prime rate or
(iii) CD base rate, in each case plus a margin of up to 2.25%,
subject to certain adjustments based on the ratio of
Operating's total debt to EBITDA. At June 30, 1997,
borrowings under the Senior Credit Facility bore interest at
rates ranging from 6.82% to 7.82% under the Eurodollar rate
option. The Company pays a commitment fee ranging from .250%
to .375% on the unused commitment under the Senior Credit
Facility.
To reduce the impact of changes in interest rates on its
floating rate long-term debt, the Company has entered into
certain interest rate swap agreements with certain of the
participating banks under the Senior Credit Facility. At June
30, 1997, an interest rate swap agreement covering a notional
balance of $150,000,000 was outstanding which requires the
Company to pay a fixed rate of 5.77%, plus the applicable
interest rate margin. This agreement matures during 1998, and
allows for the optional extension by the counterparty for an
additional period. In addition, the Company has entered into
interest rate swap agreements covering an aggregate notional
principal amount of $250,000,000, with forward start dates in
August 1997 and November 1997. These agreements require the
Company to pay fixed rates ranging from 5.75% to 5.77%, plus
the applicable interest rate margin, and will automatically
terminate in the event that one month LIBOR equals or exceeds
6.75% on any monthly reset date. These agreements mature
during 1999 and 2000, and certain of the agreements allow for
the optional extension by the counterparty for an additional
period.
As interest rates change under the interest rate swap
agreements, the differential to be paid or received is
recognized as an adjustment to interest expense. The Company
is not exposed to credit loss as its interest rate swap
agreements are with certain of the
10
<PAGE>
participating banks under the Company's Senior Credit Facility. During
the three months and six months ended June 30, 1997, the Company
recognized additional interest expense under its interest rate swap
agreements of approximately $66,000 and $587,000,
respectively.
On March 14, 1997, Operating entered into an agreement to
amend its Senior Credit Facility. The amendment provides for,
among other items, a reduction in the interest rate margins
under the Senior Credit Facility, as well as increased
flexibility for the Company as it relates to investments,
permitted lines of businesses and the incurrence of unsecured
indebtedness. The amendment also resulted in a $50,000,000
increase in the availability under the Revolving Credit
Facility.
(5) Related Party Transactions
Affiliates of Goldman Sachs own limited partnership interests
in MCC. Maryland Cable, which is controlled by an affiliate
of Goldman Sachs, owned the Maryland Cable System which served
customers in and around Prince Georges County, Maryland.
Operating managed the Maryland Cable System under the Maryland
Cable Agreement, which was entered into in September of 1994.
Operating earned a management fee, payable monthly, equal to
4.7% of the revenues of Maryland Cable, and was reimbursed for
certain expenses. Pursuant to such agreement, Operating was
also entitled to an incentive management fee if the Maryland
Cable System sold above certain threshold amounts. Operating
earned management fees of $1,087,000 and $5,464,000,
respectively, during the three month and six month periods
ended June 30, 1997.
Effective January 31, 1997, the Maryland Cable System was sold
to Jones Communications of Maryland, Inc. In conjunction with
the sale, Operating recognized incentive management fees of
$986,000 and $5,069,000, respectively, for the three month and
six month periods ended June 30, 1997. Additional incentive
management fees may be recognized upon dissolution of Maryland
Cable, anticipated to occur during the first quarter of 1998.
There is no assurance that any of such fees will be realized.
Although Operating is no longer involved in the active
management of those cable television systems, Operating has
entered into an agreement with Maryland Cable to oversee the
activities, if any, of Maryland Cable through the liquidation
of the partnership. Pursuant to such agreement, Operating
will earn a nominal monthly fee.
(6) Pending Acquisitions
On June 20, 1997, the Company entered into a definitive
agreement with Time Warner to exchange cable television
systems in the states of Wisconsin and Indiana serving in
aggregate approximately 125,000 customers. According to the
terms of the agreement, Time Warner will receive systems
serving approximately 55,000 customers, while the Company will
receive systems serving approximately 70,000 customers. In
addition to the contribution of its systems, the Company will
pay $20,000,000 to Time Warner. This exchange is subject to
regulatory approval and certain closing conditions and is
expected to close by year end.
11
<PAGE>
(7) Subsequent Events
Effective July 1, 1997, the Company completed the acquisition
of certain cable television systems from Harron for a purchase
price of $34.5 million, subject to working capital
adjustments. The Harron Systems provide service to
approximately 22,000 customers in 36 communities located near
the Company's existing operations in the Dallas/Fort Worth
Metroplex.
12
<PAGE>
<TABLE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Consolidating Schedule - Balance Sheet Information
As of June 30, 1997
(unaudited)
(in thousands)
ASSETS
<CAPTION>
Combined
Operating Capital Elimin- Operating Capital Elimin-
Partnerships II Operating ations Consolidated Capital III Company ations Company
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents 5,425 1 (1,137) 0 4,289 1 1 754 0 5,045
Accounts receivable, net 48,973 0 (3,137) (26,237) 19,599 0 0 0 0 19,599
Prepaid expenses and
other 2,577 0 1,164 0 3,741 0 0 0 0 3,741
----------- ----- --------- ---------- ----------- ------ ------ ------- -------- ---------
Total current assets 56,975 1 (3,110) (26,237) 27,629 1 1 754 0 28,385
Property and equipment, net 616,791 0 6,607 0 623,398 0 0 0 0 623,398
Other assets, net 1,037,863 0 1,578,053 (1,562,773) 1,053,143 0 0 8,716 (24,746) 1,037,113
Investment in subsidiaries 0 0 138,778 (138,778) --- 0 0 449,056 (449,056) ---
----------- ----- --------- ---------- ----------- ------ ------ ------- -------- ---------
Total assets 1,711,629 1 1,720,328 (1,727,788) 1,704,170 1 1 458,526 (473,802) 1,688,896
=========== ===== ========= ========== =========== ====== ====== ======= ======== =========
LIABILITIES AND PARTNERS' CAPTIAL
Current liabilities:
Current maturities of
long-term debt 190 0 74,198 0 74,388 0 0 0 0 74,388
Accrued liabilities 80,148 0 76,570 (96,877) 59,841 0 0 18,467 (24,746) 53,562
Accrued interest 10,589 0 7,620 (10,589) 7,620 0 0 2,969 0 10,589
----------- ----- --------- ---------- ----------- ------ ------ ------- -------- ---------
Total current
liabilities 90,927 0 158,388 (107,466) 141,849 0 0 21,436 (24,746) 138,539
Long-term debt 1,481,925 0 1,113,132 (1,481,544) 1,113,513 0 0 299,182 0 1,412,695
Subsidiary limited partner
interest 0 0 (246) 0 (246) 0 0 0 0 (246)
Partners' capital 138,777 1 449,054 (138,778) 449,054 1 1 137,908 (449,056) 137,908
----------- ----- --------- ---------- ----------- ------ ------ ------- -------- ---------
Total liabilities and
parterns' capital 1,711,629 1 1,720,328 (1,727,788) 1,704,170 1 1 458,526 (473,802) 1,688,896
=========== ===== ========= ========== =========== ====== ====== ======= ======== =========
</TABLE>
13
<PAGE>
<TABLE>
MARCUS CABLE COMPANY, L.P. AND SUBSIDIARIES
Consolidating Schedule - Statement of Operations Information
For the six months ended June 30, 1997
(unaudited)
(in thousands)
<CAPTION>
Combined Operating
Operating Capital Elimin- Consol- Capital Elimin-
Partnerships II Operating ations idated Capital III MCC ations Company
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Cable services 225,352 --- --- --- 225,352 --- --- --- --- 225,352
Management fees --- --- 5,464 --- 5,464 --- --- --- --- 5,464
--------- ----- ------- ----- ------ ------ ------ ---- ------- -------
Total revenues 225,352 --- 5,464 --- 230,816 --- --- --- --- 230,816
--------- ----- ------- ----- ------ ------ ------ ---- ------- -------
Operating expenses:
Selling, service and
system management 83,703 --- 1,142 --- 84,845 --- --- --- --- 84,845
General and administrative 27,918 --- 6,880 --- 34,798 --- --- --- --- 34,798
Allocated corporate costs 2,243 --- (2,243) --- --- --- --- --- --- ---
Depreciation and amortization 88,565 --- 609 --- 89,174 --- --- --- --- 89,174
----------- ----- ------ ----- ------ ------ ------ ---- ------- -------
202,429 --- 6,388 --- 208,817 --- --- --- --- 208,817
----------- ----- ------ ----- ------ ------ ------ ---- ------- -------
Operating income 22,923 --- (924) --- 21,999 --- --- --- --- 21,999
Other (income) expense:
Interest (income) expense, net 73,719 --- (20,023) 0 53,696 --- --- 19,651 --- 73,347
Equity earnings (loss) of
subsidiaries --- --- 50,796 (50,796) --- --- --- 31,697 (31,697) ---
----------- ----- ------ ----- ------ ------ ----- ------ ------- -------
73,719 --- 30,773 (50,796) 53,696 --- --- 51,348 (31,697) 73,347
----------- ----- ------ ----- ------- ------ ----- ------ -------- -------
Net loss (50,796) --- (31,697) 50,796 (31,697) --- --- (51,348) 31,697 (51,348)
======= ===== ======= ====== ======= ====== ===== ====== ====== =======
</TABLE>
14
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
attached consolidated financial statements and notes thereto, and
with the Company's audited consolidated financial statements and
notes thereto for the fiscal year ended December 31, 1996, included
in the Company's Annual Report on Form 10-K.
GENERAL
The Company's business strategy focuses on three principles: (i)
forming regional clusters of cable television systems through
strategic acquisitions, internal growth and divestitures of non-strategic
assets, (ii) promoting internal growth and enhanced
operating and financial performance by streamlining operations in
newly clustered systems and applying innovative marketing techniques
and (iii) upgrading systems and employing state-of-the-art
technology to enhance existing service and to develop, on a cost-effective
basis, ancillary revenue streams.
The Company has followed a systematic approach in acquiring,
operating and developing cable television systems based on the
principle of increasing operating cash flow while maintaining a high
quality standard of service. The Company's acquisition strategy
focuses on cable television systems in proximity to its existing
systems or of sufficient size to serve as cores for new operating
regions. The Company believes that increasing its operating scale
through strategic acquisitions, as well as through internal growth,
enhances its ability to reduce its programming costs, develop new
technologies, offer new services and improve operating margins, and
thus improve its long-term competitiveness.
In continuing to implement the Company's acquisition strategy, the
Company acquired the Harron Systems in July of 1997, which are in
proximity to other systems owned by the Company in the Dallas/Ft.
Worth Metroplex. The Company's basic customer count increased by
over 22,000 as a result of this acquisition. Funding for the $34.5
million purchase was provided by borrowings under the Company's
revolving credit facility.
In addition to the Harron Acquisition, the Company has entered into
a definitive agreement with Time Warner to exchange cable television
systems in the states of Wisconsin and Indiana serving in total
approximately 125,000 customers. The Company will exchange systems
serving approximately 55,000 customers in municipalities surrounding
the metropolitan areas of Milwaukee and Green Bay, Wisconsin, for
systems serving approximately 70,000 customers in the communities
of Eau Claire, Beloit, Marshfield and Merrill, Wisconsin and Warsaw,
Indiana. In addition to the contribution of its systems, the
Company will pay an additional $20,000,000 to Time Warner. Funding
for this purchase is expected to be provided by borrowings under the
Company's revolving credit facility. The exchange is subject to
regulatory approval and certain closing conditions and is scheduled
to close by year end. This acquisition and exchange are described
in Note 6 to the unaudited consolidated financial statements.
Future expansion efforts are expected to focus on acquiring or
exchanging systems in proximity
15
<PAGE>
to existing operations, with the strategic goal of forming or expanding
clusters of systems to permit operating efficiencies and economies of scale.
Opportunistic divestitures, in areas where consolidation opportunities do not
exist, are also considered.
The Company strives to maintain high technological standards in its
cable television systems on a cost-effective basis. Currently, the
Company is systematically rebuilding its cable systems so that
within the next three years substantially all existing systems will
have a bandwidth of between 450 MHz and 860 MHz. This program
should enable the Company to deliver technological innovations to
its customers as such services become commercially viable. As part
of this program, certain systems, such as those serving the areas
in and around Ft. Worth/Tarrant County (Texas), Glendale/Burbank
(California) and suburban Birmingham (Alabama) together with
selected systems in Wisconsin, Indiana, Tennessee and other states
in which the Company operates cable systems, are being upgraded to
750 MHz or 860 MHz with two-way communication capabilities. Capital
expenditures are expected to approximate $180,000,000 (or $150 per
customer) in 1997, of which approximately $116,000,000 is for
bandwidth upgrades, rebuilds and other enhancements to the cable
systems. The Company purchased property and equipment totaling
approximately $87,463,000 during the six months ended June 30, 1997,
of which approximately $58,000,000 pertained to upgrades and
rebuilds . The Company expects to fund future capital expenditures
through cash generated from operations and available borrowings
under the revolving credit facility.
LIQUIDITY AND CAPITAL RESOURCES
Acquiring and upgrading cable television systems is contingent upon
the availability of cash provided by operations, borrowings from the
Company's existing credit facilities and the Company's ability to
obtain additional debt or equity financing. Although in the past
the Company has been able to obtain financing through equity
investments, debt issuances and bank borrowings, there can be no
assurance that the capital resources necessary to accomplish the
Company's business strategy will be available, or that the terms
will be favorable to the Company.
The Company has grown significantly over the past several years
through acquisitions as well as through upgrading, extending and
rebuilding its existing cable television systems. Since expansion
by means of these methods is capital intensive, the Company has
relied upon various sources of financing to meet its funding needs.
These sources have included contributions from equity investors,
borrowings under various debt instruments and positive cash flows
from operations.
As of June 30, 1997, unreturned capital contributions from equity
investors totaled approximately $493,327,000. The Company has an
aggregate of $1,487,083,000 of indebtedness outstanding in the form
of the 11 7/8% Debentures, 13 1/2% Notes, 14 1/4% Notes, borrowings
under the Senior Credit Facility and note payable and capital lease
obligations. The Company has an additional $276,059,000 of
borrowing capacity under its Revolving Credit Facility. The Company
generated cash flows from operating activities of $73,179,000 for
the six month period ended June 30, 1997. In addition to cash flows
from operating activities, funding from equity contributions and
borrowings have been sufficient to meet the Company's debt service,
working capital and capital expenditure requirements.
16
<PAGE>
Cash interest is payable monthly, quarterly and semiannually on
borrowings outstanding under the Company's Senior Credit Facility
and the 11 7/8% Debentures. No cash interest is payable on the 13 1/2%
Notes until February 1, 2000 and no cash interest is payable on the
14 1/4% Notes until December 15, 2000. Maturities of long-term debt
approximate $496,446,000 over the next five years. The Company
expects to cover both interest and principal payments on its long-term
obligations through internally generated funds and borrowings
under the Senior Credit Facility.
RESULTS OF OPERATIONS
The Company generates the majority of its revenues from monthly
customer fees for basic, premium and other ancillary services (such
as the rental of home terminal devices) and from installation
income. Additional revenues are generated from pay-per-view
programming, advertising sales and commissions from home shopping
networks. Revenues were also generated from fees earned in
conjunction with the sale of and the management of Maryland Cable.
The comparability of operating results between the three and six
months ended June 30, 1997 and the corresponding period for 1996 are
affected by several events which occurred during 1996 and 1997.
These events include 1) the acquisition of cable systems as follows:
a system serving 700 basic customers in Texas on January 11, 1996,
a system serving 2,600 basic customers in Mississippi on July 8,
1996, and a system serving 5,400 basic customers in Indiana on July
31, 1996; 2) the sale of the Company's cable system serving 12,600
customers in Washington on October 11, 1996; 3) the sale of the
previously managed Maryland Cable system on January 31, 1997; and
4) as described in Note 1 to the unaudited consolidated financial
statements, the conforming change in the accounting for franchise
fees in certain of the Systems (collectively referred to as the "Pro
Forma Adjustments").
Revenues
Revenues for the three months ended June 30, 1997 totaled
$116,369,000, an increase of $9,366,000, or 8.8%, over the revenues
of $107,003,000 for the three months ended June 30, 1996. Revenues
for the six months ended June 30, 1997 of $230,816,000, increased
$21,097,000, or 10.1%, over the revenues of $209,719,000 for the six
months ended June 30, 1996. Substantially all of this increase was
attributable to growth in basic, pay-per-view and advertising sales
revenue and increases in management fee revenue as a result of the
sale of the Maryland Cable Systems. The effects of these increases
in revenue were offset by a revenue reduction of approximately
$1,700,000 for the three months ended June 30, 1997 and $3,400,000
for the six months ended June 30, 1997, as a result of the
conforming change regarding franchise fee itemization in the former
Sammons Systems. Normalizing the effects of the Pro Forma
Adjustments, pro forma revenue increased $10,999,000, or 10.5%, and
$21,024,000, or 10.3%, respectively, for the three and six months
ended June 30, 1997.
The Company's basic service revenues increased $6,295,000, or 8.2%,
to $82,900,000 for the three months ended June 30, 1997 from
$76,605,000 for the three months ended June 30, 1996.
17
<PAGE>
For the six months ended June 30, 1997, basic service revenues increased
$12,550,000, or 8.4%, to $162,782,000 from $150,232,000 for the six
months ended June 30, 1996. Pro forma basic service revenues
increased $8,179,000, or 10.9%, and $16,297,000, or 11.1%,
respectively, for the three and six months ended June 30, 1997. The
growth in basic service revenue primarily reflects increases in the
number of basic customers, new product offerings and the full effect
of the rate adjustments taken in June of 1996. During June 1997,
rates for basic services were increased for a majority of the
Company's systems throughout the month. Although some of the actual
rate adjustments took effect in the month of June, the full impact
of the increase will not be reflected until the third quarter of
this year.
Pay-per-view revenue increased $1,608,000, or 138.7%, to $2,767,000
for the three months ended June 30, 1997 from $1,159,000 for the
three months ended June 30, 1996. For the six months ended June 30,
1997, pay-per-view revenue increased $1,843,000, or 69.5%, to
$4,495,000 from $2,652,000 for the six months ended June 30, 1996.
The majority of this increase is principally due to the success of
the Holyfield/Tyson rematch. The effects of the acquisitions and
divestitures had minimal effects on pay-per-view revenue.
The Company's advertising revenues increased $564,000, or 15.0%, to
$4,326,000 for the three months ended June 30, 1997 from $3,762,000
for the three months ended June 30, 1996. Advertising revenues for
the six months ended June 30, 1997 increased $1,113,000, or 16.6%,
to $7,821,000 from $6,708,000 for the six months ended June 30,
1996. Pro forma advertising revenue increased $577,000, or 15.4%,
and $1,135,000, or 17.0%, for the three and six months ended June
30, 1997, respectively. This growth is mainly the result of
increases in the number of insertable channels, improved channel
utilization and greater market demand.
The Company's management fee revenues increased $508,000, or 87.7%,
to $1,087,000 for the three months ended June 30, 1997 from $579,000
for the three months ended June 30, 1996. Management fee revenue
for the six months ended June 30, 1997 increased $4,318,000, or
376.8%, to $5,464,000 from $1,146,000 for the six months ended June
30, 1996. These increases were due to the recognition of an
incentive management fee in conjunction with the sale of the
Maryland Cable System. Operating recognized incentive management
fees of $986,800 in May 1997 and $4,083,000 in January 1997 in
conjunction with the sale. The Company will continue to earn a
nominal monthly management fee through the liquidation of the
Maryland Cable partnership. Additional incentive management fees
may be recognized upon the termination of the Maryland Cable
partnership in January of 1998.
18
<PAGE>
Customer Information
The following table illustrates the changes in the Company's
basic customers and premium units which have significantly
contributed to the increases noted in revenues. The increase
in basic customers for the six months ended June 30, 1997
equates to an annualized growth rate of 2.4%. Substantially
all of the internal growth in basic customers is attributable
to continued marketing and sales efforts as well as the
continued extension of physical cable plant in order to pass
additional dwelling units. The decrease in premium units from
December 31, 1996 was anticipated as a reaction to the annual
rate increase implemented during June of 1997.
<TABLE>
<CAPTION>
Pro Forma
June 30, December 31, June 30,
1997 1996 1996 (a)
<S> <C> <C> <C>
Basic Customers 1,195,287 1,181,293 1,172,701
Premium Units 660,357 666,702 648,511
- --------------------
<FN>
(a) Excludes approximately 12,600 basic customers and 5,000
premium units served by the cable systems in Washington which
were subsequently sold to a third party on October 11, 1996.
Includes approximately 9,800 basic customers and 4,200 premium
units served by systems in Mississippi and Indiana purchased
in July 1996.
</FN>
</TABLE>
Costs and Expenses
Selling, service and system management expenses consist primarily
of salaries and other costs associated with programming, marketing,
engineering and plant maintenance and advertising. General and
administrative costs consist primarily of salaries for
administrative personnel, customer billing costs, bad debt expense,
property taxes and copyright fees.
Selling, service and system management expenses increased
$4,128,000, or 10.5%, to $43,413,000 for the three months ended June
30, 1997 from $39,285,000 for the three months ended June 30, 1996.
For the six months ended June 30, 1997, selling, service and system
management expenses increased $6,495,000, or 8.3%, to $84,845,000
from $78,350,000 for the six months ended June 30, 1996. The
majority of the increase noted resulted from an increase in
programming costs of $3,998,000, or 16.0%, and $6,768,000, or 13.5%,
respectively, for the three and six months ended June 30,1997.
Substantially all of this programming cost increase is attributable
to increases in the cost of basic satellite programming as a result
of incremental basic customer growth and the addition of satellite
programming channels to certain of the Company's rebuilt markets.
Pro forma selling, service and system management expenses increased
$4,203,000, or 10.7%, and $6,597,000, or 8.4%, respectively, for the
three and six months ended June 30, 1997.
19
<PAGE>
General and administrative expenses decreased $663,000, or 3.7%, to
$17,300,000 for the three months ended June 30, 1997 from
$17,963,000 for the three months ended June 30, 1996. For the six
months ended June 30, 1997, general and administrative expenses
decreased $956,000, or 2.7%, to $34,798,000 from $35,754,000 for the
six months ended June 30, 1996. The decrease was due primarily to
the reduction in franchise fee expense, as a result of the
conforming itemization of such costs on customers' bills. Pro forma
general and administrative expenses increased $1,162,000, or 7.2%,
and $2,706,000, or 8.4%, respectively, for the three and six months
ended June 30, 1997. The pro forma increase in general and
administrative expense mainly represents costs from increased
staffing of customers service operations and employee wage
adjustments.
Depreciation and amortization expenses increased $5,222,000, or
13.1%, for the three months ended June 30, 1997 to $45,028,000 from
$39,806,000 for the three months ended June 30, 1996. For the six
months ended June 30, 1997, depreciation and amortization increased
$10,275,000, or 13.0%, to $89,174,000 from $78,899,000 for the six
months ended June 30, 1996. The increase is principally a result
of the additional capital expenditures incurred to rebuild and
upgrade the physical plant and equipment of certain of the Systems.
Operating Income
Operating income increased $679,000, or 6.8%, to $10,628,000 for the
three months ended June 30, 1997 from $9,949,000 for the comparable
period in 1996. Operating income increased $5,283,000, or 31.6%,
to $21,999,000 for the six months ended June 30, 1997 from
$16,716,000 for the same period in 1996. These increases are due
primarily to the recognition of the incentive management fee in
conjunction with the sale of Maryland cable and the impact of the
acquisition and divestiture activity noted above.
The cable television industry generally measures the performance of
a cable system in terms of system cash flow before corporate
expenses and depreciation and amortization (often referred to as
"Cable System Cash Flow") and a cable television company in terms
of operating income before depreciation and amortization (often
referred to as "EBITDA"). These measures are not intended to be a
substitute or improvement on the terms disclosed on the financial
statements, rather these measures are included as industry
standards. Cable System Cash Flow increased $6,130,000, or 11.7%,
to $58,666,000 for the three months ended June 30, 1997 from
$52,536,000 for the three months ended June 30, 1996. For the six
months ended June 30, 1997, Cable System Cash Flow increased
$12,609,000, or 12.5%, to $113,731,000 from $101,122,000 for the six
months ended June 30, 1996. EBITDA increased $5,901,000, or 11.9%,
to 55,656,000 for the three months ended June 30, 1997 from
$49,755,000 for the three months ended June 30, 1996. For the six
months ended June 30, 1997, EBITDA increased $15,558,000, or 16.3%,
to $111,173,000 from $95,615,000 for the six months ended June 30,
1996. Pro forma Cable System Cash Flow and EBITDA for the three
months and six months ended June 30, 1997 increased 12.2% and 11.5%
and 13.0% and 12.5%, respectively, over the comparable periods in
1996.
20
<PAGE>
Other Expenses
Net interest expense increased $1,119,000, or 3.1%, to $36,799,000
for the three months ended June 30, 1997 from $35,680,000 for the
three months ended June 30, 1996. For the six months ended June 30,
1997, net interest expense increased $1,881,000, or 2.6%, to
$73,347,000 from $71,466,000 for the six months ended June 30, 1996.
These increases are primarily due to the scheduled increase in
accretion for the 13 1/2% Notes and the 14 1/4% Notes of $4,143,000
for the six months ended June 30, 1997. This accretion increase was
offset by a decrease in the average borrowing costs under the Senior
Credit Facility. Total indebtedness, including public indebtedness,
increased to $1,487,083,000 at June 30, 1997 from $1,421,748,000 at
June 30, 1996. The weighted average interest rate, including
commitment fees, for total debt outstanding during the three months
and six months ended June 30, 1997 was 9.84% and 9.88%,
respectively, compared with 9.94% and 9.98%, respectively, for the
three months and six months ended June 30, 1996.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 125,
"Transfers of Financial Assets and Extinguishments of Liabilities".
SFAS No. 125 provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of
liabilities. The provisions of SFAS No. 125 are generally effective
for transactions occurring after December 31, 1996. There has been
no impact on the Company upon adoption. No other recent accounting
pronouncements have been issued which the Company has not adopted
and which are expected to have a material effect on the Company's
consolidated financial statements and related disclosures.
INFLATION
Based on the FCC's current rate regulation standards, an inflation
factor is included in the benchmark formula in establishing the
initial permitted rate. Subsequent to establishing the initial
rate, an annual rate increase based on the year-end inflation factor
is permitted. In addition to annual rate increases, certain costs
over the prescribed inflation factors, defined by the FCC as
"external costs", may be passed through to customers.
Certain of the Company's expenses, such as those for wages and
benefits, equipment repair and replacement, billing and marketing
generally increase with inflation. However, the Company does not
believe that its financial results have been adversely affected by
inflation. Periods of high inflation could have an adverse effect
to the extent that increased borrowing costs for floating rate debt
may not be offset by increases in revenues. As of June 30, 1997,
the Company had $720,000,000 of outstanding borrowings under the
Senior Credit Facility which are subject to floating interest rates.
The rates are based on either the Eurodollar rate, prime rate, CD
base rate or Federal Funds rate, plus a margin of up to 2.25%
subject to certain adjustments based on the ratio of Operating's
total debt to EBITDA.
21
<PAGE>
To reduce the impact of changes in interest rates on its floating
rate long-term debt, the Company entered into certain interest rate
swap agreements with certain of the participating banks under the
Senior Credit Facility. At June 30, 1997, an interest rate swap
agreement covering a notional balance of $150,000,000 was
outstanding which requires the Company to pay a fixed rate of 5.77%,
plus the applicable interest rate margin. This agreement matures
during 1998, and allows for the optional extension by the
counterparty for an additional period. In addition, the Company has
entered into interest rate swap agreements covering an aggregate
notional principal amount of $250,000,000, with forward start dates
in August 1997 and November 1997. These agreements require the
Company to pay fixed rates ranging from 5.75% to 5.77%, plus the
applicable interest rate margin, and will automatically terminate
in the event that one month LIBOR equals or exceeds 6.75% on any
monthly reset date. These agreements mature during 1999 and 2000,
and certain of the agreements allow for the optional extension by
the counterparty for an additional period.
REGULATION IN THE CABLE TELEVISION INDUSTRY
The operation of cable television systems is extensively regulated
by the FCC, certain state governments and most local governments.
On February 8, 1996, the President signed into law the 1996 Telecom
Act. This new law alters the regulatory structure governing the
nation's telecommunications providers. It removes barriers to
competition in both the cable television market and the local
telephone market. Among other things, it reduces the scope of cable
rate regulation.
The 1996 Telecom Act required the FCC to undertake a host of
implementing rulemakings, the final outcome of which cannot yet be
determined. Moreover, Congress and the FCC have frequently
revisited the subject of cable television regulation and may do so
again. Future legislative and regulatory changes could adversely
affect the Company's operations.
The 1996 Telecom Act sunsets FCC regulation of CPST rates for all
cable television systems (regardless of size) on March 31, 1999.
It also relaxes existing uniform rate requirements by specifying
that uniform rate requirements do not apply where the operator faces
"effective competition," and by exempting bulk discounts to multiple
dwelling units, although complaints about predatory pricing still
may be made to the FCC. It is not possible at this time to predict
the outcome of such rulemakings. Until the various required
rulemakings are implemented which amend the rules under the previous
cable acts, the Company continues to be subject to the provisions
of the 1992 Cable Act.
The Company believes that it has materially complied with provisions
of the 1996 Telecom Act and the 1992 Cable Act, including rate
setting provisions promulgated by the FCC on April 1, 1993.
However, in jurisdictions which have chosen not to certify to
regulate certain rates, refunds covering a one-year period on basic
service may be ordered if the Company is regulated at a later date
and is unable to justify its rates through a benchmark or cost-of-service
filing. The amount of refunds, if any, which may be payable
by the Company in the event that these systems' rates are
successfully challenged by franchising authorities is not currently
estimable. During the three month period ended June 30, 1997, there
were no rate refunds issued. There are, however, rate
22
<PAGE>
complaints currently pending at the FCC concerning certain of the Company's
CPST rates. Pursuant to the re-regulation covering the time period
from September 1, 1993 through May 15, 1994, there are currently
under review by the FCC 17 cost-of-service filings and one benchmark
filing. Pursuant to the re-regulation covering the time period from
May 1994 to the date hereof, there are 40 benchmark filings under
review by the FCC. These pending reviews potentially affect 157,600
of the Company's basic customers. During 1996 and 1997, reviews
involving certain Systems serving approximately 140,400 customers
were completed in which the FCC found no errors in the Company's
rate calculations. As a result, the related complaints were denied.
If the FCC determines that the Company's CPST rates are
unreasonable, it has the authority to order the Company to reduce
such rates and to refund to customers any overcharges with interest
occurring from the date such rate complaint was filed at the FCC.
The amount of refunds, if any, which may be required by the FCC in
the event the Company's CPST rates are found to be unreasonable is
not currently estimable.
Because the FCC has not yet resolved pending rate complaints
involving the Company and because franchise authorities may certify
to regulate certain rates in the future, the overall impact of these
regulations and other provisions of the 1996 Telecom Act and the
1992 Cable Act on the Company's business cannot be determined at
this time.
23
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
There were no material legal proceedings instituted during the six
months ended June 30, 1997 to which the Company is a party or of
which any of its property is subject.
ITEM 2 - CHANGES IN SECURITIES
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Included in this report:
<TABLE>
<CAPTION>
Exhibit:
<S> <C>
27.1 Financial Data Schedule (supplied for the
information of the Commission)
</TABLE>
(b) Reports on Form 8-K
None.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each of the registrants have duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
MARCUS CABLE COMPANY, L.P.
(Registrant)
By: Marcus Cable Properties, L.P., its
general partner,
By: Marcus Cable Properties, Inc., its
general partner,
August 14, 1997 By: /s/ Jeffrey A. Marcus
Jeffrey A. Marcus
Its: President, Chief Executive
Officer and Sole Director of
Marcus Cable Properties, Inc.
(Principal Executive Officer)
By: /s/ Thomas P. McMillin
Thomas P. McMillin
Its: Senior Vice President and Chief
Financial Officer of Marcus
Cable Properties, Inc.
(Principal Financial and
Accounting Officer)
MARCUS CABLE OPERATING COMPANY, L.P.
(Registrant)
By: Marcus Cable Company, L.P., its general
partner,
By: Marcus Cable Properties, L.P., its
general partner,
By: Marcus Cable Properties, Inc.,
its general partner,
August 14, 1997 By: /s/ Jeffrey A. Marcus
Jeffrey A. Marcus
Its: President, Chief Executive
Officer and Sole Director of
Marcus Cable Properties, Inc.
(Principal Executive Officer)
By: /s/ Thomas P. McMillin
Thomas P. McMillin
Its: Senior Vice President and Chief
Financial Officer of Marcus
Cable Properties, Inc.
(Principal Financial and
Accounting Officer)
25
<PAGE>
MARCUS CABLE CAPITAL CORPORATION
(Registrant)
August 14, 1997 By: /s/ Jeffrey A. Marcus
Jeffrey A. Marcus
Its: President, Chief Executive
Officer and Sole Director of
Marcus Cable Capital
Corporation (Principal
Executive Officer)
By: /s/ Thomas P. McMillin
Thomas P. McMillin
Its: Senior Vice President and Chief
Financial Officer of Marcus
Cable Capital Corporation
(Principal Financial and
Accounting Officer)
MARCUS CABLE CAPITAL CORPORATION II
(Registrant)
August 14, 1997 By: /s/ Jeffrey A. Marcus
Jeffrey A. Marcus
Its: President, Chief Executive
Officer and Sole Director of
Marcus Cable Capital
Corporation II (Principal
Executive Officer)
By: /s/ Thomas P. McMillin
Thomas P. McMillin
Its: Senior Vice President and Chief
Financial Officer of Marcus
Cable Capital Corporation II
(Principal Financial and
Accounting Officer)
26
<PAGE>
MARCUS CABLE CAPITAL CORPORATION III
(Registrant)
August 14, 1997 By: /s/ Jeffrey A. Marcus
Jeffrey A. Marcus
Its: President, Chief Executive
Officer and Sole Director of
Marcus Cable Capital
Corporation III (Principal
Executive Officer)
By: /s/ Thomas P. McMillin
Thomas P. McMillin
Its: Senior Vice President and Chief
Financial Officer of Marcus
Cable Capital Corporation III
(Principal Financial and
Accounting Officer)
27
<PAGE>
