CATV - CABLE TELEVISION (31)
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PAUL SCHERER & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
330 MADISON AVENUE. NEW YORK, N. Y. 10017
TELEPHONE 12121 661.-9300 FACSIMILE (2121 983-1921
Vision Cable of Pinellas, Inc.
Vision Cable of Pinellas Division
Financial Statements
December 31, 1992
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PAUL SCHERER & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
330 MADISON AVENUE' NEW YORK, N. Y. 10017
TELEPHONE (212) 661-9300 FACSIMILE 12121 983-1921
Independent Auditor's Report.
Vision Cable of Pinellas, Inc.
Vision Cable of Pinellas Division
Paramus, New Jersey
We have audited the accompanying statement of net liabilities of the Vision Cable of Pinellas
Division of Vision Cable of Pinellas, Inc. as of December 31, 1992 and the related statements of
income and cash flows for the year then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these [mancial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the [mancial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the [mancial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall [manciaI statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above present fairly,
in all material respects, the financial position of the Vision Cable of Pinellas Division of Vision Cable
of Pinellas, Inc. as of December 31, 1992, and the results of its operations and cash flows for the year
then ended in conformity with generally accepted accounting principles.
f o..u..JL ~~ +- ~7
April 22, 1993
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Exhibit "A"
Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Statement of Net Liabilities
December 31. 1992
Assets
Current assets
Cash
Accounts receivable-less allowance for doubtful
accounts and adjustments of $39,724
Notes and other receivables (due within one year)
Total current assets
Property, plant and equipment-less accumulated
depreciation (Notes 1 and 2)
Other investments
Deposits, deferred charges and other assets
Intangible assets-less accumulated amortization (Notes 1 and 3)
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Accrued income taxes (Note 6)
Total current liabilities
Advances from Vision Cable Communications, Inc. (Note 1)
Other long-term liability
Total liabilities
Net liabilities
See accompanying Notes to Financial Statements.
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$ 196,563
245,115
183.932
625,610
12,373,243
360,414
176,916
1.275.974
$ 14.8]2lli
$ 1,509,652
3.795.250
5,304,902
12,574,709
132.395
18.012.006
$(3.199.842.)
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Operating revenue
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Exhibit "B"
Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Statement of. Income and Net Liabilities
For the Year Ended December 31. 1992
Operatin g expenses
Production, selling and administrative
Depreciation
Amortization
Management fee (Note 5)
Total operating expenses
Operating income
Other income (expense)
Interest income
Interest expense
Other
Net other income
Income before taxes on income
Taxes on income (Note 6)
Net income
Net liabilities - beginning of year
Net liabilities - end of year
See accompanying Notes to Financial Statements.
$ 44.313.720
26,810,733
4,312,553
212,419
1.148.827
32.484.532
11.829.188
721
(251)
479.323
479.793
12,308,981
4.286.647.
8,022,334
(11.222.183)
$ (3.199.842)
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Exhibit "C"
Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Statement of Cash Flows
For the Year Ended December 31. 1992
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
Income from partnerships
Gain on sale of assets
Decrease in accounts receivable
Increase in notes and other receivables
Decrease in prepaid income taxes
Decrease in deposits, deferred charges and other assets
Decrease in accounts payable and accrued liabilities
Increase in income taxes accrued
Increase in other long-term liability
Net cash provided by operating activities
Cash flows from (used in) investing activities:
Capital expenditures
Proceeds from sale of assets
Acquisition of intangible asset
Distributions from partnership
Net cash used in investing activities
Cash flows from financing activities:
Decrease in advances from Vision Cable Communications, Inc.
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
-Continued-
$ 8,022,334
4,524,972
(397,941)
(61,713)
152,753
(13,482)
49,294
22,329
(1,347,421)
971,804
93.327
12.016.256
(3,431,499)
63,404
(33,000)
-124.298
(3.206.797)
(8.708.937)
(8.708.937)
100,522
96.041
$ 196.563
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Exhibit "c"
Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Statement of Cash Flows
For the Year Ended December 31. 1992
- Continued -
Supplemental cash flow disclosure:
Cash paid during year for:
Income taxes - intercompany
Income taxes - other
Interest expense
See accompanying Notes to Financial Statements.
$ 3,296,270
18,750
251
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Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Notes to Financial Statements
December 31. 1992
1.
Summary of si~ificant accountin~ policies
Description
Vision Cable of Pinellas is a division of Vision Cable of Pinellas, Inc. which is owned by
Vision Cable Communications, Inc.
The Division provides cable service to subscribers located in Clearwater, Florida and provides
advertising to businesses and individuals.
Credit risk
A significant portion of the customer base is concentrated within the local geographical areas
of the cable system. The Division generally extends credit to its customers and the ultimate
collection of accounts receivable could be affected by the local economies. Management
performs continuous credit evaluations of its customers and may require cash in advance or
other special arrangements from certain customers. Management does not believe that there
is any significant credit risk which could have a material effect on the [mancial condition of
the Division.
Franchise costs
Costs of obtaining franchises to operate cable' systems are amortized by the straight-line
method over the periods of the respective franchises. The lives of such franchises range from
3 to 25 years.
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,2.
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Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Notes to Financial Statements
December 31. 1992
Property. plant and equipment
Property, plant and equipment is stated at cost less depreciation. Depreciation is calculated
using principally accelerated methods based upon estimated useful lives of 15 to 311h years
for buildings and land improvements and 5 to 7 years for automobiles, furniture and fixtures
and all other equipment. Costs of new cable television customer connections are capitalized
at standard rates.
Statement of cash flows
For the purpose of the statement of cash flows, thcDivision considers all highly liquid
investments with a maturity of less than one year to be cash equivalents.
Property. plant and equipment
Property, plant and equipment is summarized as follows:
Land
Buildings and land improvements
Technical equipment
Other equipment, automobiles, furniture and fixtures
Leasehold improvements
Total cost
Less: Accumulated depreciation
Net fixed assets
$ 495,902
4,439,703
76,416,822
4,042,573
16.777
85,411,777
73.038.534
$12.373.243
Additions to property, plant and equipment totalled approximately $3,431,499 in 1992.
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Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Notes to Financial Statements
December 31. 1992
3.
Intangibles
Intangible assets less accumulated amortization consisted of the following:
Franchises
Going concern
$1,957,302
284.000
2,241,302
965.328
$1.275.974
Less: Accumulated amortization
Net
Amortization
Period
(Years)
3-25
25
Amortization of these items amounted to $212,419 in 1992 and has been charged against
current earnings.
4.
Commitments
a. The Division occupies premises under long-term leases expiring on various dates through
February 28, 1998 which provide for current annual rentals of $50,849. Future minimum
rental commitments (excluding escalation costs) under noncancellable operating leases are:
Year Amount
1993 40,845
1994 16,451
1995 16,451
1996 16,451
1997 16,451
Thereafter 2.742
$109.391
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Vision Cable of Pinellas. Inc.
Vision Cable of Pinellas Division
Notes to Financial Statements
December 31. 19.22
b. The Division is contingently liable with respect to certain pending lawsuits. We have been
advised by management of the Division that the amount of liability with respect to the
litigation will not, in their opinion, have a material adverse affect upon the financial condition
of the Division. Accordingly, the [mancial statements do not reflect any provision or reserve
for these lawsuits.
c. The Division is contingently liable for letters of credit of $86,000 issued to secure performance
bonds in various municipalities in which it operates cable systems.
d. Examination of the income tax returns of the Division has been completed (or in the case of
income tax returns which have not been examined, the period of assessment of additional
income tax has expired) through at least the year 1983.
The Division is contingently liable for additional income taxes which may be assessed on
examination of income tax returns for subsequent years. The balance sheet does not contain
any provision for this contingency.
5.
Management fees
Vision Cable Communications, Inc. provided certain administrative services for the Vision
Cable of Pinellas Division of Vision Cable of Pinellas, Inc. Charges for these services
amounted to $1,148,827 for the year ended December 31, 1992.
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Vision Cable of Pinellas. Inc.
Vision Cable of PinelIas Division
Notes to Financial Statements
December 31. 1992
6.
Income taxes
The provision for income taxes consisted of the folIowing:
Federal
$ 4,141,647
State
145.000
$ 4.286.647
Income tax expense differs from the amount computed by applying the federal statutory rate
to pre-tax income. The difference is reconciled as follows:
Income before taxes on income
$12,308,981
Federal statutory income tax rate
34%
34% of pretax income
4,185,054
State income taxes, net
of federal effect
95,700
Other
Total
(5.893)
$ 4.286.647
The Division's taxable income is included in the consolidated federal income tax return filed
by Advance Publications, Inc., the group's parent company and in the state income tax return
fLIed by Vision Cable of Pinellas, Inc. Each entity is assigned a tax attributable to that unit's
taxable income.