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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
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: 000-15686
ENSTAR INCOME PROGRAM IV-3, L.P.
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(Exact name of registrant as specified in its charter)
GEORGIA 58-1648320
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
12405 POWERSCOURT DRIVE
ST. LOUIS, MISSOURI 63131
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(Address of principal executive offices including zip code)
(314) 965-0555
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(Registrant's telephone number, including area code)
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 reports), and (2) has been subject to such filing requirements
for the past 90 days. YES [X] NO [ ]
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ENSTAR INCOME PROGRAM IV-3, L.P.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2003
TABLE OF CONTENTS
PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements - Enstar Income Program IV-3, L.P.
Condensed Statements of Net Assets in Liquidation as of March 31, 2003
and December 31, 2002 3
Condensed Statement of Changes in Net Assets in Liquidation for the three months
ended March 31, 2003 4
Condensed Statement of Operations for the three months ended March 31, 2002 5
Condensed Statement of Cash Flows for the three months ended March 31, 2002 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 4. Controls and Procedures 18
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
CERTIFICATIONS 21
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED STATEMENTS OF NET ASSETS IN LIQUIDATION
(SEE NOTE 2)
MARCH 31, DECEMBER 31,
2003 2002
---- ----
(UNAUDITED)
ASSETS:
Cash and cash equivalents $ 1,685,700 $ 2,597,700
Accounts receivable, net 7,900 8,700
Prepaid expenses and other assets 14,600 6,800
Property, plant and equipment 454,600 454,600
Franchise cost 2,800 2,800
Equity in net assets of Joint Venture -- 42,000
----------- -----------
Total assets 2,165,600 3,112,600
----------- -----------
LIABILITIES:
Accounts payable and accrued liabilities 255,900 293,100
Due to affiliates 289,800 1,227,900
----------- -----------
Total liabilities 545,700 1,521,000
----------- -----------
NET ASSETS IN LIQUIDATION:
General Partners (28,100) (28,400)
Limited Partners 1,648,000 1,620,000
----------- -----------
$ 1,619,900 $ 1,591,600
=========== ===========
See accompanying notes to condensed financial statements.
3
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(SEE NOTE 2)
THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Additions:
Revenues $ 193,000
Distribution from Joint Venture 42,000
Interest income 3,800
----------
Total additions 238,800
----------
Deductions:
Service costs 76,000
General and administrative expenses 56,400
General partner management fees and reimbursed expenses 30,400
Capital expenditures 2,200
Equity in changes in net assets in liquidation of Joint Venture 42,000
Other expense 3,500
----------
Total deductions 210,500
----------
Net increase in net assets in liquidation 28,300
NET ASSETS IN LIQUIDATION, beginning of period 1,591,600
----------
NET ASSETS IN LIQUIDATION, end of period $1,619,900
==========
See accompanying notes to condensed financial statements.
4
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2002
(UNAUDITED)
REVENUES $ 582,100
---------
OPERATING EXPENSES:
Service costs 252,200
General and administrative expenses 71,300
General partner management fees and reimbursed expenses 92,700
Depreciation and amortization 79,800
---------
496,000
---------
Operating income 86,100
---------
OTHER INCOME (EXPENSE):
Interest income 11,500
Other expense (65,400)
---------
(53,900)
---------
Income before equity in net income of joint venture 32,200
EQUITY IN NET INCOME OF JOINT VENTURE 40,100
---------
NET INCOME $ 72,300
=========
NET INCOME ALLOCATED TO GENERAL PARTNERS $ 700
=========
NET INCOME ALLOCATED TO LIMITED PARTNERS $ 71,600
=========
NET INCOME PER UNIT OF LIMITED PARTNERSHIP
INTEREST $ 1.79
=========
LIMITED PARTNERSHIP UNITS OUTSTANDING
DURING PERIOD 39,900
=========
See accompanying notes to condensed financial statements.
5
ENSTAR INCOME PROGRAM IV-3, L.P.
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2002
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 72,300
Adjustments to reconcile net income to net cash
from operating activities:
Equity in net income of joint venture (40,100)
Depreciation and amortization 79,800
Changes in:
Accounts receivable, prepaid expenses and
other assets 5,100
Accounts payable, accrued liabilities and
due to affiliates 135,200
-----------
Net cash from operating activities 252,300
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14,800)
-----------
Net cash from investing activities (14,800)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (125,900)
-----------
Net cash from financing activities (125,900)
-----------
Net increase in cash 111,600
CASH, beginning of period 2,698,500
-----------
CASH, end of period $ 2,810,100
===========
See accompanying notes to condensed financial statements.
6
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. INTERIM FINANCIAL STATEMENTS
The accompanying condensed interim financial statements for Enstar Income
Program IV-3, L.P. (the Partnership) as of March 31, 2003, and for the three
months ended March 31, 2003 and 2002, are unaudited. These condensed interim
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Partnership's Annual Report on Form
10-K for the year ended December 31, 2002. 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 changes in net assets in liquidation for the three
months ended March 31, 2003 are not necessarily indicative of results for the
entire year.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. These estimates include useful lives of property, plant and
equipment, valuation of long-lived assets and allocated operating cost. These
estimates include useful lives of property, plant and equipment, valuation of
long-lived assets and allocated operating costs. Actual results could differ
from those estimates.
As discussed in Note 2, the financial statements as of March 31, 2003 and
December 31, 2002 are presented on a liquidation basis of accounting.
Accordingly, the financial information in the condensed statements of changes in
net assets in liquidation for such periods is presented on a different basis of
accounting than the financial statements for the three months ended March 31,
2002, which is prepared on the historical cost basis of accounting. As a
result, depreciation and amortization ceased upon conversion to liquidation
accounting and capital expenditures are expensed as incurred.
2. LIQUIDATION BASIS ACCOUNTING AND SALES OF CABLE SYSTEMS
Our Corporate General Partner continues to operate our cable television systems
during our divestiture transactions for the benefit of our unitholders.
On April 10, 2002, pursuant to an asset purchase agreement dated August 29,
2001, the Partnership completed the sale of all of the Partnership's Illinois
cable television systems in and around Fairfield and Shelbyville, Illinois to
Charter Communications Entertainment I, LLC ("CCE-I"), an affiliate of the
Corporate General Partner and an indirect subsidiary of Charter Communications,
Inc. ("Charter") for a total sale price of approximately $7,333,300 and,
together with Enstar Income Program IV-2, L.P. and Enstar Income Program IV-1,
L.P. (collectively with the Partnership the "Joint Venturers"), completed the
sale of the Enstar Cable of Macoupin County's (the "Joint Venture") systems to
CCE-I, an affiliate of the Corporate General Partner and an indirect subsidiary
of Charter for a total sale price of approximately $9,076,800, the Partnership's
one-third share of which is approximately $3,025,600 (the "Charter Sale"). The
Charter Sale is part of a larger transaction in which the Partnership and five
other affiliated partnerships (which, together with the Partnership are
collectively referred to as the "Charter Selling Partnerships") sold all of
their assets used in the operation of their respective Illinois cable television
systems to CCE-I and two of its affiliates (also referred to, with CCE-I, as the
"Purchasers") for a total cash sale price of $63,000,000. Each Charter Selling
Partnership received the same value per customer. In addition, the Limited
Partners of each of the Charter Selling Partnerships approved an amendment to
their respective partnership agreement to allow the sale of assets to an
affiliate of such partnership's General Partner. The Purchasers are each
indirect subsidiaries of the Corporate General Partner's ultimate parent
company, Charter, and, therefore, are affiliates of the Partnership and each of
the other Charter Selling Partnerships.
The Charter Sale resulted from a sale process actively pursued since 1999, when
the Corporate General Partner sought purchasers for all of the cable television
systems of the Selling Partnerships, as well as eight other affiliated limited
partnership cable operators of which the Corporate General Partner is also the
general partner. This effort was undertaken primarily because, based on the
Corporate General Partner's experience in the cable television industry, it was
concluded that generally applicable market conditions and competitive factors
were making (and would increasingly make) it extremely difficult for smaller
operators of rural cable systems (such as the Partnership
7
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
and the other affiliated Enstar partnerships) to effectively compete and be
financially successful. This determination was based on the anticipated cost of
electronics and additional equipment to enable the Partnership's and the Joint
Venture's systems to operate on a two-way basis with improved technical
capacity, insufficiency of the Partnership's and Joint Venture's cash reserves
and cash flows from operations to finance such expenditures, limited customer
growth potential due to the Partnership's and Joint Venture's systems' rural
location, and a general inability of a small cable system operator such as the
Partnership to benefit from economies of scale and the ability to combine and
integrate systems that large cable operators have. Although limited plant
upgrades have been made, the Corporate General Partner projected that if the
Partnership and Joint Venture made the comprehensive additional upgrades deemed
necessary to enable enhanced and competitive services, particularly activation
of two-way capability, the Partnership and Joint Venture would not recoup the
costs or regain its ability to operate profitably within the remaining term of
its franchises, and as a result, making these upgrades would not be economically
prudent.
After setting aside $1,400,000 to fund the Fulton, Kentucky headend's working
capital needs and paying or providing for the payment of the expenses of the
Charter Sale, the Corporate General Partner made distributions from the Joint
Venture to the Partnership of their allocable share of the remaining net sale
proceeds, in accordance with its partnership agreement. The Partnership made an
initial distribution on or about May 15, 2002, with a second distribution made
on or about September 24, 2002 from the Charter Sale.
On November 8, 2002 the Partnership entered into an asset purchase agreement
providing for the sale of its remaining cable system in Fulton, Kentucky to
Telecommunications Management, LLC (Telecommunications Management) for a total
sale price of approximately $1,344,000 (approximately $825 per customer
acquired). This sale is a part of a larger transaction in which the Partnership
and nine other affiliated partnerships (which, together with the Partnership are
collectively referred to as the "Selling Partnerships") would sell all of their
remaining assets used in the operation of their respective cable systems to
Telecommunications Management for a total cash sale price of approximately
$15,341,600 (before adjustments) (the Telecommunications Management Sale). The
Telecommunications Management Sale is subject to the approval of a majority of
the holders of the Partnership's units and approval of the holders of the other
Selling Partnerships. In addition, the transaction is subject to certain closing
conditions, including regulatory and franchise approvals. In March 2003, a
majority of the Limited Partners approved the Telecommunications Management Sale
and a plan of liquidation.
On February 6, 2003, the Partnership entered into a side letter amending the
asset purchase agreement providing for the sale of all of its cable systems to
Telecommunications Management. The February 6, 2003 side letter amends the asset
purchase agreement and Deposit Escrow Agreement to extend the date of the second
installment of the deposit and the Outside Closing Date each by 60 days. On
April 7, 2003, the second installment of the escrow deposit was due and was not
made.
On April 24, 2003, the Partnership entered into another side letter amending the
asset purchase agreement providing for the sale of all of its cable systems to
Telecommunications Management. The April 24, 2003 side letter amends the asset
purchase agreement and Deposit Escrow Agreement to extend the date of the second
installment of the deposit to May 15, 2003 and the Outside Closing Date to
September 30, 2003.
The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale of
the Partnership's final cable system and the subsequent liquidation and
dissolution of the Partnership. In March 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. Upon changing to liquidation basis accounting, the
Partnership recorded $23,700 of accrued costs of liquidation in accounts payable
and accrued liabilities representing an estimate of the costs to be incurred
after the sale of the final cable system but prior to dissolution of the
Partnership. Because management is unable to develop reliable estimates of
future operating results or the ultimate realizable value of property, plant and
equipment due to the current uncertainties surrounding the final dissolution of
the Partnership, no adjustments have been recorded to reflect assets at
estimated realizable values or to reflect estimates of future operating results.
These adjustments will be recorded once a sale is imminent and the net sales
proceeds are reasonably estimable. Accordingly, the assets in the accompanying
statements of net assets in liquidation of the Partnership as of March
8
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
31, 2003 and December 31, 2002 have been stated at historical book values.
Distributions ultimately made to the partners upon liquidation will differ from
the net assets in liquidation recorded in the accompanying statements of net
assets in liquidation as a result of future operations, the sale proceeds
ultimately received by the Partnership and adjustments if any to estimated costs
of liquidation. No adjustments were made to estimated costs of liquidation
during the three months ended March 31, 2003.
The Corporate General Partner's intention is to settle the outstanding
obligations of the Partnership and terminate the Partnership as expeditiously as
possible. Final dissolution of the Partnership and related cash distributions to
the partners will occur upon obtaining final resolution of all liquidation
issues.
3. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
The Partnership has a management and service agreement (the Management
Agreement) with Enstar Cable Corporation ("Enstar Cable"), a wholly owned
subsidiary of the Corporate General Partner, for a monthly management fee of 5%
of gross revenues. The Partnership's management fee expense was $9,700 and
$29,100 for the three months ended March 31, 2003 and 2002, respectively.
Management fees are non-interest bearing.
Enstar Cable has entered into an identical agreement with the Joint Venture of
which the Partnership is a joint venturer and co-general partner, except that
the Joint Venture pays Enstar Cable a 4% management fee. The Joint Venture's
management fee expense to Enstar Cable approximated $19,000 for the three months
ended March 31, 2002. In addition, the Joint Venture is also required to pay the
Corporate General Partner an amount equal to 1% of the Joint Venture's gross
revenues. The Joint Venture's management fee expense to the Corporate General
Partner approximated $4,700 for the three months ended March 31, 2002. No
management fee is payable to Enstar Cable by the Partnership with respect to any
amounts received by the Partnership from the Joint Venture.
The Management Agreement also provides that the Partnership reimburse Enstar
Cable for direct expenses incurred on behalf of the Partnership and the
Partnership's allocable share of Enstar Cable's operational costs. Additionally,
Charter and its affiliates provide other management and operational services for
the Partnership and the Joint Venture. These expenses are charged to the
properties served based primarily on the Partnership's or Joint Venture's
allocable share of operational costs associated with the services provided. The
total amount charged to the Partnership for these services was $20,700 and
$63,600 for the three months ended March 31, 2003 and 2002, respectively. The
total amount charged to the Joint Venture for these costs approximated $49,100
for the three months ended March 31, 2002.
Substantially all programming services are purchased through Charter. Charter
charges the Partnership and Joint Venture for these costs based on an allocation
of its costs. The Partnership recorded programming fee expense of $38,300 and
$137,700 for the three months ended March 31, 2003 and 2002, respectively. The
Joint Venture recorded programming fee expense of $107,000 for the three months
ended March 31, 2002. Programming fees are included in service costs in the
accompanying condensed statements of changes in net assets in liquidation and
statements of operations.
As disclosed in Charter's Quarterly Report on Form 10-Q, the parent of the
Corporate General Partner and the Manager is the defendant in twenty-two class
action and shareholder lawsuits and is the subject of a grand jury investigation
being conducted by the United States Attorney's Office for the Eastern District
of Missouri and an SEC investigation. Charter is unable to predict the outcome
of these lawsuits and government investigations. An unfavorable outcome of these
matters could have a material adverse effect on Charter's results of operations
and financial condition which could in turn have a material adverse effect on
the Partnership.
4. 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, excluding gain on sale of cable systems, has been allocated 99% to the
Limited Partners and 1% to the General Partners. Gain on sale of cable systems
has been allocated in
9
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
accordance with the partnership agreement, first to the Limited Partners and
then to the General Partners to eliminate any negative equity balance on the
date of sale, and then in the amount of 99% to the Limited Partners and 1% to
the General Partners. Gains and losses will be allocated in this manner until
the Limited Partners have received an amount equal to their adjusted
subscription amount and liquidation preference, as defined, and thereafter 80%
to the Limited Partners and 20% to the General Partners. The General Partners do
not own units of partnership interest in the Partnership, but rather hold a
participation interest in the income, losses and distributions of the
Partnership. Upon dissolution of the Partnership, any negative capital account
balances remaining after all allocation and distributions are made must be
funded by the respective partners.
Distributions have been allocated in accordance with the partnership agreement,
99% to the Limited Partners and 1% to the General Partners. Distributions will
be allocated in this manner until the Limited Partners have received an amount
equal to their adjusted subscription amount and liquidation preference, as
defined, and thereafter 80% to the Limited Partners and 20% to the General
Partners.
5. EQUITY IN NET ASSETS OF ENSTAR CABLE OF MACOUPIN COUNTY (JOINT VENTURE)
The Partnership and two affiliated partnerships, Enstar Income Program IV-1,
L.P. (Enstar IV-1) and Enstar Income Program IV-2, L.P. (Enstar IV-2), each own
one-third of the Joint Venture. Each of the Venturers share equally in the
profits and losses of the Joint Venture. The investment in the Joint Venture is
accounted for on the equity method.
As a result of this transaction, the Joint Venture changed its basis of
accounting to the liquidation basis on April 10, 2002. Accordingly, the assets
in the accompanying statement of net assets in liquidation as of December 31,
2002 have been stated at estimated realizable values and the liabilities have
been reflected at estimated settlement amounts. There were no significant
adjustments recorded upon changing to liquidation basis accounting. Net assets
in liquidation as of December 31, 2002 represent the estimated distribution to
the joint venturers. In January 2003, all remaining assets of the Joint Venture
were distributed including a final distribution of $126,000 made to the
Venturers of which the Partnership's portion is $42,000.
Condensed financial information for the Joint Venture as of December 31, 2002
and for the three months ended March 31, 2003 are presented in the following
statement of net assets in liquidation and statement of changes in net assets in
liquidation. The condensed results of operations is also presented for the three
months ended March 31, 2002. As all remaining assets of the Joint Venture have
been distributed, the statement of net assets in liquidation is not presented as
of March 31, 2003.
10
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
ENSTAR CABLE OF MACOUPIN COUNTY
CONDENSED STATEMENT OF NET ASSETS IN LIQUIDATION
DECEMBER 31, 2002
ASSETS:
Cash and cash equivalents $171,700
--------
Total assets 171,700
--------
LIABILITIES:
Due to affiliates 45,700
--------
Total liabilities 45,700
--------
NET ASSETS IN LIQUIDATION:
Enstar Income Program IV-1, L.P. 42,000
Enstar Income Program IV-2, L.P. 42,000
Enstar Income Program IV-3, L.P. 42,000
--------
$126,000
========
11
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
ENSTAR CABLE OF MACOUPIN COUNTY
CONDENSED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Deductions:
Distribution to joint venturers $(126,000)
---------
Net decrease in net assets in liquidation (126,000)
NET ASSETS IN LIQUIDATION, beginning of period 126,000
---------
NET ASSETS IN LIQUIDATION, end of period $ --
=========
12
ENSTAR INCOME PROGRAM IV-3, L.P.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
ENSTAR CABLE OF MACOUPIN COUNTY
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2002
(UNAUDITED)
REVENUES $474,000
--------
OPERATING EXPENSES:
Service costs 157,900
General and administrative expenses 49,200
General partner management fees and reimbursed expenses 72,800
Depreciation and amortization 75,800
--------
355,700
--------
Operating income 118,300
OTHER INCOME:
Interest income 2,000
--------
NET INCOME $120,300
========
13
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 us. 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 us. In addition to the information provided herein, reference is made to
our Annual Report on Form 10-K for the year ended December 31, 2002, for
additional information regarding such matters and the effect thereof on our
business.
We conduct our cable television business operations both (i) through the direct
ownership and operation of certain cable television systems and (ii) through our
participation as a partner with a one-third interest in Enstar Cable of Macoupin
County (the Joint Venture). Our participation is equal to our affiliated
partners, Enstar Income Program IV-1, L.P. (Enstar IV-1) and Enstar Income
Program IV-2, L.P. (Enstar IV-2), with respect to capital contributions,
obligations and commitments, and results of operations. Accordingly, in
considering the financial condition and results of operations for us,
consideration must also be made of those matters as they relate to the Joint
Venture. The following discussion reflects such consideration, and with respect
to results of operations, a separate discussion is provided for each entity.
RESULTS OF OPERATIONS
THE PARTNERSHIP
The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale of
the Partnership's final cable system and the subsequent liquidation and
dissolution of the Partnership. In March 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. Upon changing to liquidation basis accounting, the
Partnership recorded $23,700 of accrued costs of liquidation in accounts payable
and accrued liabilities representing an estimate of the costs to be incurred
after the sale of the final cable system but prior to dissolution of the
Partnership. Because we are unable to develop reliable estimates of future
operating results or the ultimate realizable value of property, plant and
equipment due to the current uncertainties surrounding the final dissolution of
the Partnership, no adjustments have been recorded to reflect assets at
estimated realizable values or to reflect estimates of future operating results.
These adjustments will be recorded once a sale is imminent and the net sales
proceeds are reasonably estimable. Accordingly, the assets in the accompanying
statements of net assets in liquidation of the Partnership as of March 31, 2003
and December 31, 2002 have been stated at historical book values. Distributions
ultimately made to the partners upon liquidation will differ from the net assets
in liquidation recorded in the accompanying statement of net assets in
liquidation as a result of future operations, the sale proceeds ultimately
received by the Partnership and adjustments if any to estimated costs of
liquidation. No adjustments were made to estimated costs of liquidation during
the three months ended March 31, 2003.
On April 10, 2002, we completed the sale of all of the Partnership's Illinois
cable television systems in and around Fairfield and Shelbyville, Illinois.
Accordingly, results of operations for the three months ended March 31, 2003 are
not comparable to and are on a different basis of accounting than the three
months ended March 31, 2002.
Revenues decreased $389,100 from $582,100 to $193,000, or 66.8%, for the three
months ended March 31, 2003 compared to the corresponding period in 2002. The
decrease was due to a decline in the number of basic and premium service
customers as a result of the sale of the Partnership's Illinois cable systems in
April 2002. As of March 31, 2003 and 2002, we had approximately 1,600 and 4,900
basic service customers, respectively, and 300 and 900 premium service
customers, respectively.
Service costs decreased $176,200 from $252,200 to $76,000, or 69.9%, for the
three months ended March 31, 2003 compared to the corresponding period in 2002.
Service costs represent programming costs and other costs directly attributable
to providing cable services to customers. The decrease was primarily due to the
sale of the Partnership's
14
Illinois cable systems in April 2002.
General and administrative expenses decreased $14,900 from $71,300 to $56,400,
or 20.9%, for the three months ended March 31, 2003 compared to the
corresponding period in 2002. The decrease was primarily due to the sale of the
Partnership's Illinois cable systems in April 2002 offset by an increase in
professional fees and state taxes.
General partner management fees and reimbursed expenses decreased $62,300 from
$92,700 to $30,400, or 67.2%, for the three months ended March 31, 2003 compared
to the corresponding period in 2002. The decrease was primarily due to a
decrease in management fees due to a decrease in revenues as a result of the
sale of the Partnership's Illinois cable systems in April 2002.
Depreciation and amortization expense decreased from $79,800 to $0 for the three
months ended March 31, 2003 compared to the corresponding period in 2002. The
decrease was primarily due to the sale of the Partnership's Illinois cable
systems in April 2002. In addition, depreciation and amortization ceased upon
adoption of liquidation basis accounting.
Interest income decreased $7,700 from $11,500 to $3,800, or 67.0%, for the three
months ended March 31, 2003 compared to the corresponding period in 2002. The
decrease was primarily due to lower average cash balances available for
investment during the three months ended March 31, 2003 compared to the
corresponding period in 2002 and lower interest rates.
Other expense of $3,500 for the three months ended March 31, 2003 represent
costs incurred in connection with the proposed sales transaction. Other expense
of $65,400 for the three months ended March 31, 2002 represent costs associated
with the sale of the Partnership's Illinois cable systems.
THE JOINT VENTURE
On April 10, 2002, the Joint Venture completed the sale of its cable systems and
accordingly had no results of operations for the three months ended March 31,
2003.
Final dissolution of the Joint Venture occurred in January 2003 with the final
cash distribution to the joint venturers of $126,000.
LIQUIDITY AND CAPITAL RESOURCES
Our primary objective, having invested net offering proceeds in cable systems
and the Joint Venture, is to distribute to our partners all available cash from
the sale of cable systems and all cash flow, if any, from operations after
providing for expenses and any planned capital requirements relating to the
expansion, improvement and upgrade of its cable systems.
Cash and cash equivalents decreased $912,000 from $2,597,700 at December 31,
2002 to $1,685,700 at March 31, 2003 primarily due to a repayment of $1,000,000
on the amounts due to affiliates. Amounts due to affiliates at December 31, 2002
primarily represent accrued and unpaid management fees and other allocated
expenses accrued since the fourth quarter of 2000. Cash and cash equivalents
increased $111,600 from $2,698,500 at December 31, 2001 to $2,810,100 at March
31, 2002 as a result of $252,300 of cash provided by operating activities offset
by capital expenditures of $14,800. Capital expenditures in the three months
ended March 31, 2003 were $2,200.
We distributed cash of $125,900 to our partners during the three months ended
March 31, 2002.
We believe that cash generated by our operations will be adequate to fund any
capital expenditures required by our franchise agreements and other liquidity
requirements in 2003 and through the proposed sale. In light of pending sale
transactions, we do not anticipate making significant additional upgrades to the
Fulton, Kentucky cable plant or headend electronics.
INVESTING ACTIVITIES
15
Significant capital would be required for a comprehensive plant and headend
upgrade particularly in light of the high cost of electronics to enable two-way
service, to offer high speed cable modem Internet service and other interactive
services, as well as to increase channel capacity and allow a greater variety of
video services. The Joint Venture's and our capital expenditures for recent
upgrades have been made with available funds, and have enhanced the economic
value of the Joint Venture's and our systems and permitted the Joint Venture to
maintain compliance with franchise agreements.
The estimated cost of upgrading our system to two-way capability in order to be
able to offer high-speed Internet service from the Fulton, Kentucky headend, as
well as to increase channel capacity and allow additional video services, would
be approximately $1.5 million (for an upgrade to 550 megahertz (MHz) capacity)
to $1.8 million (for an upgrade to 870 MHz capacity). Given the high cost of
this comprehensive upgrade plan, the limited funds available to us, the pending
sale and the belief that such a plan is not economically prudent, the Corporate
General Partner does not presently anticipate that it will proceed with a
comprehensive upgrade plan. The Corporate General Partner will continue to
maintain compliance with franchise agreements and be economically prudent.
Cash generated by our operations together with available cash balances will be
used to fund any capital expenditures as required by franchise authorities.
However, our present cash reserves will be insufficient to fund a comprehensive
upgrade program. If our system is 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 on terms
acceptable to us. If we are not able to attain such cash flow increases, or
obtain new sources of borrowings, we will not be able to fully complete any
cable systems upgrades as required by franchise authorities. As a result, the
value of our systems would be lower than that of systems rebuilt to a higher
technical standard.
LIQUIDATION BASIS ACCOUNTING AND SALES OF CABLE SYSTEMS
On April 10, 2002, pursuant to an asset purchase agreement dated August 29,
2001, the Partnership completed the sale of all of the Partnership's Illinois
cable television systems in and around Fairfield and Shelbyville, Illinois to
Charter Communications Entertainment I, LLC ("CCE-I"), an affiliate of the
Corporate General Partner and an indirect subsidiary of Charter Communications,
Inc. ("Charter") for a total sale price of approximately $7,333,300 and,
together with Enstar Income Program IV-2, L.P. and Enstar Income Program IV-1,
L.P., completed the sale of the Macoupin Joint Venture's systems to CCE-I for a
total sale price of approximately $9,076,800, the Partnership's one-third share
of which is approximately $3,025,600 (the "Charter Sale"). The Charter Sale is
part of a larger transaction in which the Partnership and five other affiliated
partnerships (which, together with the Partnership are collectively referred to
as the "Charter Selling Partnerships") sold all of their assets used in the
operation of their respective Illinois cable television systems to CCE-I and two
of its affiliates (also referred to, with CCE-I, as the "Purchasers") for a
total cash sale price of $63,000,000. Each Charter Selling Partnership received
the same value per customer. In addition, the Limited Partners of each of the
Charter Selling Partnerships approved an amendment to their respective
partnership agreement to allow the sale of assets to an affiliate of such
partnership's General Partner. The Purchasers are each indirect subsidiaries of
the Corporate General Partner's ultimate parent company, Charter, and,
therefore, are affiliates of the Partnership and each of the other Charter
Selling Partnerships.
The Charter Sale resulted from a sale process actively pursued since 1999, when
the Corporate General Partner sought purchasers for all of the cable television
systems of the Selling Partnerships, as well as eight other affiliated limited
partnership cable operators of which the Corporate General Partner is also the
general partner. This effort was undertaken primarily because, based on the
Corporate General Partner's experience in the cable television industry, it was
concluded that generally applicable market conditions and competitive factors
were making (and would increasingly make) it extremely difficult for smaller
operators of rural cable systems (such as the Partnership and the other
affiliated partnerships) to effectively compete and be financially successful.
This determination was based on the anticipated cost of electronics and
additional equipment to enable the Partnership's and the Joint Venture's systems
to operate on a two-way basis with improved technical capacity, insufficiency of
the Partnership's and Joint Venture's cash reserves and cash flows from
operations to finance such expenditures, limited customer growth potential due
to the Partnership's and Joint Venture's systems' rural location, and a general
inability of a small cable system operator such as the Partnership to benefit
from economies of scale and the ability to combine and integrate systems that
large cable operators have. Although limited plant upgrades have been made, the
16
Corporate General Partner projected that if the Partnership and Joint Venture
made the comprehensive additional upgrades deemed necessary to enable enhanced
and competitive services, particularly activation of two-way capability, the
Partnership and Joint Venture would not recoup the costs or regain its ability
to operate profitably within the remaining term of its franchises, and as a
result, making these upgrades would not be economically prudent.
As a result of the above transaction, the Joint Venture changed its basis of
accounting to the liquidation basis on April 10, 2002. Accordingly, the assets
in the accompanying statement of net assets in liquidation as of December 31,
2002 have been stated at estimated realizable values and the liabilities have
been reflected at estimated settlement amounts. There were no significant
adjustments recorded upon changing to liquidation basis accounting. Net assets
in liquidation as of December 31, 2002 represent the estimated distribution to
the joint venturers. In January 2003, all remaining assets of the Joint Venture
were distributed including a final distribution of $126,000 made to the joint
venturers, of which the Partnership's portion is $42,000.
After setting aside $1,400,000 to fund the Fulton, Kentucky headend's working
capital needs and paying or providing for the payment of the expenses of the
Charter Sale, the Corporate General Partner made distributions from the Joint
Venture to the Partnership of their allocable share of the remaining net sale
proceeds, in accordance with its partnership agreement. The Partnership made an
initial distribution on or about May 15, 2002, with a second distribution made
on or about September 24, 2002 from the Charter Sale.
On November 8, 2002 the Partnership entered into an asset purchase agreement
providing for the sale of its remaining cable system in Fulton, Kentucky to
Telecommunications Management, LLC (Telecommunications Management) for a total
sale price of approximately $1,344,000 (approximately $825 per customer
acquired). This sale is a part of a larger transaction in which the Partnership
and nine other affiliated partnerships (which, together with the Partnership are
collectively referred to as the "Selling Partnerships") would sell all of their
remaining assets used in the operation of their respective cable systems to
Telecommunications Management for a total cash sale price of approximately
$15,341,600 (before adjustments) (the Telecommunications Management Sale). The
Telecommunications Management Sale is subject to the approval of a majority of
the holders of the Partnership's units and approval of the holders of the other
Selling Partnerships. In addition, the transaction is subject to certain closing
conditions, including regulatory and franchise approvals. In March 2003, a
majority of the Limited Partners approved the Telecommunications Management Sale
and a plan of liquidation.
On February 6, 2003, the Partnership entered into a side letter amending the
asset purchase agreement providing for the sale of all of its cable systems to
Telecommunications Management. The February 6, 2003 side letter amends the asset
purchase agreement and Deposit Escrow Agreement to extend the date of the second
installment of the deposit and the Outside Closing Date each by 60 days. On
April 7, 2003, the second installment of the escrow deposit was due and was not
made.
On April 24, 2003, the Partnership entered into another side letter amending the
asset purchase agreement providing for the sale of all of its cable systems to
Telecommunications Management. The April 24, 2003 side letter amends the asset
purchase agreement and Deposit Escrow Agreement to extend the date of the second
installment of the deposit to May 15, 2003 and the Outside Closing Date to
September 30, 2003.
The Partnership finalized its proposed plan of liquidation in December 2002 in
connection with the filing of a proxy to obtain partner approval for the sale of
the Partnership's final cable system and the subsequent liquidation and
dissolution of the Partnership. In March 2003, the required number of votes
necessary to implement the plan of liquidation were obtained. As a result, the
Partnership changed its basis of accounting to the liquidation basis as of
December 31, 2002. Upon changing to liquidation basis accounting, the
Partnership recorded $23,700 of accrued costs of liquidation in accounts payable
and accrued liabilities representing an estimate of the costs to be incurred
after the sale of the final cable system but prior to dissolution of the
Partnership. Because we are unable to develop reliable estimates of future
operating results or the ultimate realizable value of property, plant and
equipment due to the current uncertainties surrounding the final dissolution of
the Partnership, no adjustments have been recorded to reflect assets at
estimated realizable values or to reflect estimates of future operating results.
These adjustments will be recorded once a sale is imminent and the net sales
proceeds are reasonably estimable. Accordingly, the assets in the accompanying
statements of net assets in liquidation of the Partnership as of March 31, 2003
and December 31, 2002 have been stated at historical book values. Distributions
ultimately made to the partners upon liquidation will differ from the net assets
in liquidation recorded in the accompanying statements of net assets in
liquidation as a
17
result of future operations, the sale proceeds ultimately received by the
Partnership and adjustments if any to estimated costs of liquidation. No
adjustments were made to estimated costs of liquidation during the three months
ended March 31, 2003.
The Corporate General Partner's intention is to settle the outstanding
obligations of the Partnership and terminate the Partnership as expeditiously as
possible. Final dissolution of the Partnership and related cash distributions to
the partners will occur upon obtaining final resolution of all liquidation
issues.
CERTAIN TRENDS AND UNCERTAINTIES
Insurance coverage is maintained for all of the cable television properties
owned or managed by Charter to cover damage to cable distribution systems,
customer 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 owned or managed by Charter,
including our properties.
All of our customers are served by our system in Fulton, Kentucky, and
neighboring communities. Significant damage to this 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 insurable risks.
As disclosed in Charter's Quarterly Report on Form 10-Q, the parent of our
Corporate General Partner and our Manager is the defendant in twenty-two class
action and shareholder lawsuits and is the subject of a grand jury investigation
being conducted by the United States Attorney's Office for the Eastern District
of Missouri and an SEC investigation. Charter is unable to predict the outcome
of these lawsuits and government investigations. An unfavorable outcome of these
matters could have a material adverse effect on Charter's results of operations
and financial condition which could in turn have a material adverse effect on
us.
It is difficult to assess the impact the general economic slowdown will have on
future operations. This could result in reduced spending by customers and
advertisers, which could reduce the Joint Venture's and our revenues and
operating cash flow, as well as the collectibility of accounts receivable.
INFLATION
Certain of our expenses, including those of the Joint Venture, 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 financial
results have been, or will be, adversely affected by inflation in a material
manner, provided that we are able to increase service prices periodically, of
which there can be no assurance.
ITEM 4. CONTROLS AND PROCEDURES.
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Within the 90 days prior
to the date of this report, our Corporate General Partner carried out an
evaluation, under the supervision and with the participation of our
management, including our Chief Administrative Officer and Principal
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based upon that evaluation, our Chief
Administrative Officer and Principal Financial Officer concluded that our
disclosure controls and procedures are effective to ensure that
information that is required to be disclosed by the Partnership in reports
that it files in its periodic SEC reports is recorded, processed,
summarized and reported within the terms specified in the SEC rules and
forms.
(b) CHANGES IN INTERNAL CONTROLS. There were no significant changes in our
internal controls or in other factors that could significantly affect
those controls subsequent to the date that our Corporate General Partner
carried out this evaluation.
18
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In December 2002, a proxy was filed with the SEC seeking to obtain approval of
the Limited Partners for the sale of the Partnership's remaining cable system
and the subsequent liquidation and dissolution of the Partnership. On March 14,
2003, the SEC review process was completed and proxy statements were mailed to
the holders of the limited partnership units. A majority vote was reached in
March 2003 although the consent solicitation period remains open until May 16,
2003.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
Exhibit
Number Description of Document
------ -----------------------
2.1a Asset Purchase Agreement, dated November 8, 2002, by and among
Telecommunications Management, LLC and Enstar Income Program II-2,
L.P., Enstar Income Program IV-3, L.P., Enstar Income Program
1984-1, L.P., Enstar Income/Growth Program Six-A, L.P., Enstar VII,
L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar XI, L.P., Enstar
IV/PBD Systems Venture and Enstar Cable of Cumberland Valley
(Incorporated by reference to Exhibit 2.1 to the quarterly report of
Form 10-Q of Enstar Income Program II-2, L.P. filed on November 12,
2002 (File No. 000-14505)).
2.1b Letter of Amendment, dated as of February 6, 2003, between Enstar
Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar
Income Program 1984-1, L.P., Enstar Income/Growth Program Six-A,
L.P., Enstar VII, L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar
XI, L.P., Enstar IV/PBD Systems Venture and Enstar Cable of
Cumberland Valley and Telecommunications Management, LLC
(Incorporated by reference to Exhibit 2.1 to the current report on
Form 8-K of Enstar Income/Growth Program Five-A, L.P. filed on
February 14, 2003 (File No. 000-16779)).
2.1c Letter of Amendment, dated as of April 24, 2003, between Enstar
Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar
Income Program 1984-1, L.P., Enstar Income/Growth Program Six-A,
L.P., Enstar VII, L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar
XI, L.P., Enstar IV/PBD Systems Venture and Enstar Cable of
Cumberland Valley and Telecommunications Management, LLC
(Incorporated by reference to Exhibit 2.1 to the current report on
Form 8-K of Enstar Income/Growth Program Five-A, L.P. filed on April
25, 2003 (File No. 000-16779)).
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
Administrative Officer). *
99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal
Financial Officer). *
* filed herewith
(B) REPORTS ON FORM 8-K
On February 14, 2003 the registrant filed a current report on Form 8-K
dated February 6, 2003 to announce it had entered into a side letter
amending an asset purchase agreement.
On April 25, 2003 the registrant filed a current report on Form 8-K dated
April 24, 2003 to announce it had entered into a side letter amending an
asset purchase agreement.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENSTAR INCOME PROGRAM IV-3, L.P.
By: ENSTAR COMMUNICATIONS CORPORATION
---------------------------------
Corporate General Partner
Date: May 15, 2003 By: /s/ Paul E. Martin
-----------------------------------------
Name: Paul E. Martin
Title: Senior Vice President and Corporate
Controller (Principal Financial Officer and
Principal Accounting Officer)
20
CERTIFICATIONS
Certification of Chief Administrative Officer
I, Steven A. Schumm, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Enstar Income
Program IV-3, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 15, 2003
/s/ Steven A. Schumm
- ---------------------
Steven A. Schumm
Director, Executive Vice President,
Chief Administrative Officer and Interim
Chief Financial Officer
(Principal Executive Officer)
21
Certification of Principal Financial Officer
I, Paul E. Martin, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Enstar Income
Program IV-3, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 15, 2003
/s/ Paul E. Martin
- -------------------
Paul E. Martin
Senior Vice President and
Corporate Controller (Principal Financial Officer and
Principal Accounting Officer)
22
EXHIBIT INDEX
Exhibit
Number Description of Document
------ -----------------------
2.1a Asset Purchase Agreement, dated November 8, 2002, by and among
Telecommunications Management, LLC and Enstar Income Program II-2,
L.P., Enstar Income Program IV-3, L.P., Enstar Income Program
1984-1, L.P., Enstar Income/Growth Program Six-A, L.P., Enstar VII,
L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar XI, L.P., Enstar
IV/PBD Systems Venture and Enstar Cable of Cumberland Valley
(Incorporated by reference to Exhibit 2.1 to the quarterly report of
Form 10-Q of Enstar Income Program II-2, L.P. filed on November 12,
2002 (File No. 000-14505)).
2.1b Letter of Amendment, dated as of February 6, 2003, between Enstar
Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar
Income Program 1984-1, L.P., Enstar Income/Growth Program Six-A,
L.P., Enstar VII, L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar
XI, L.P., Enstar IV/PBD Systems Venture and Enstar Cable of
Cumberland Valley and Telecommunications Management, LLC
(Incorporated by reference to Exhibit 2.1 to the current report on
Form 8-K of Enstar Income/Growth Program Five-A, L.P. filed on
February 14, 2003 (File No. 000-16779)).
2.1c Letter of Amendment, dated as of April 24, 2003, between Enstar
Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar
Income Program 1984-1, L.P., Enstar Income/Growth Program Six-A,
L.P., Enstar VII, L.P., Enstar VIII, L.P., Enstar X, L.P., Enstar
XI, L.P., Enstar IV/PBD Systems Venture and Enstar Cable of
Cumberland Valley and Telecommunications Management, LLC
(Incorporated by reference to Exhibit 2.1 to the current report on
Form 8-K of Enstar Income/Growth Program Five-A, L.P. filed on April
25, 2003 (File No. 000-16779)).
99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
Administrative Officer). *
99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal
Financial Officer). *
* filed herewith
23