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t ti Company Name: AMERICAN TELEVISION rnMMLINTCATIONS CORP. (ATC) System Name: AMEN .SAN OMM 1NTTY rART.1vTSTpN (ACC) PLANT STATISTICS Please list the MUNICIPALITIES served by each SYSTEM. Identify the ity, Town or Village with a C, T, V before listing its name and the county in which it is located. The NUMBER OF SUBSCRIBERS requested is defined as: the total number of FIRST or PRIMARY OUTLETS installed in each franchised area served. Please ensure that the number of HOMES PASSED equals or exceeds the number of SUBSCRIBERS'for.each municipality listed for this System. In Multiple Dwelling Unit building, each unit equals one "home". The MILES OF PLANT should be rounded to the nearest whole mile. IF THIS SYSTEM SERVES MORE MUNICIPALITIES THAN THE SPACES PROVIDED, PLEASE MAKE ADDITIONAL COPIES OF PAGE SURV 90/3. An illustration is provided below showing the correct method for completing the demographic information. In the illustration, the Village of Somewhere in Albany County, the cable company has 454 cable subscribers or passes 475 homes, and has 15 miles of plant. FRANCHISED NUMBER OF HOMES MILES OF oN MUNICIPALITY COUNTY SUBSCRIBERS PASSED PLANT 1) V. Somewhere Albany 454 475 15 1) C.Ithaca Tompkins 7,593 12,606 60.15 z/i/RS 2) T.Ithaca Tompkins 3,585 6,933 70.13 apo/93 3) V.Cayuga Hts. Tompkins 1,126 1,454 19.1 1-0 Soli 'iZC.s 4) V.Trumansburg Tompkins 566 - 768 10.7 /o/ZPfciy 5) V.Candor Tioga 341 443 4.56 I'75z „ TM SrfrTYt-S .7 -Z, 9 bd SURV 90/2 Company Name: System Name: '1OT AICL. (N 1900 sties' SURV 90/3 ATC ACC FRANCHISED MUNICIPALITY 6) T . Caroline 7)V. Lansing 8)T. Dryden 9) T. Newfield IO)T. Lansing 11)T. Ulysses 12)T . Danby 13)V. Newark Valley 14)11. 15)T . Groton 16)V . 17)V. Groton Dryden Freeville 18)T. Candor I9)T . Newark Valley 20) 21) 22) T. 23) 24) 25) PLANT STATISTICS (CONT'D) NUMBER OF HOMES COUNTY SUBSCRIBERS PASSED Iompkin0 527 653 Tompkins 1456 1786 Tompkins 2473 3039 Tompkins 1074 1794 Tompkins 1484 1762 Tompkins Tompkins Tioga Tompkins Tompkins Tompkins Tompkins Tioga Tioga 4R1 439 391 878 190 678 161 41(1 635 479 1022 217 829 191 4Rn 299 34/" i43 S 412. (pg '70 293 40D .7,1V3& 35 $'72 MILES OF PLANT 18.75 16.90 77.54 31.87 57.57 22.16 4-3T0W0J 144E' 1 IDA S11177if 4// /g1 20 94 7 ,4 S71:1- -745 6.1 /Z/) 11.3 7 b A SM -Tu -s 9 .3 l%o IL/ 1.05 41//L q/ 3.1 jelvaveD 16.23 /0 f 91 12.6 z0,79 (� a AMERICAN COMMUNITY CABLEVISION Annual Report . Fiscal Year 1987=88 TABLE OF CONTENTS Introduction 1 Financial Performance 2 Customer Growth 3 Customer Service 4 Repair & Maintenance 4 Line Extensions 7 System Rebuild 11 Community Service 16 Public Access 18 Cable Advertising/Production 21 Financial Statements 22 AMERICAN COMMUNITY CABLEVISION Annual Report Fiscal Year 1987''=88 INTRODUCTION The cable television industry is one of the fastest-growing, most dynamic businesses in the United States today, and American Community Cablevision is very much a part of this exciting business. The report that follows reflects the activities and results at ACC between July 1, 1987 and June 30, 1988. It provides details about both our financial and operational performance during that period. Should you have questions regarding this report, please feel free to contact me. Michael M. Withiam General Manager AMERICAN COMMUNITY CABLEVISION Annual Report Fiscal Year 1987=88 FINANCIAL PERFORMANCE American Community Cablevision achieved a positive return on, investment for the fifth consecutive year during fiscal 1988, though this year's net income of $60,234 represents a 62 percent decrease in net income and less than 1 percent return on investment. - Such a decrease in net income is not unexpected due to ACC's heavy investment in rebuilding our cable system and our continued high, levels of line extension activity. In fact, ACC expects to show a negative net income during fiscal 1989 and for the following 5-6 years as a result of this more than $11 million investment. During fiscal 1988 ACC received $1,779,231 in income from sources within the City of Ithaca and paid a total franchise fee of $69,002. A summary of financial results for fiscal 1988 begins on page 22. CUSTOMER GROWTH ACC continued to show strong customer growth in all areas of programming offerings during fiscal 1988. Basic customers increased by 2.5 percent, expanded tier customers increased by 6.5 percent, and the number of premium service units increased by 11.6 percent. Two significant milestones were reached during the year as ACC reached the 25,000 basic customer plateau and topped the 15,000 premium unit level. Growth in basic customers was particularly strong for a classic -market system such as ours. A vital and growing local economy, contributed to a significant portion of our basic growth. Steadily improving cable programming has helped spur continued growth in the number of expanded tier and premium customers. Below is a summary of ACC's customer growth by quarter during fiscal 1988. Quarterly statistics are important in this market due to the seasonal surge in population related to college students. Month Basic Tier Premium July 1987 22,112 13,869 13,199 October 1987 24,018 15,828 14,668 January 1988 24,579 16,391 15,022 April 1988 25,030 16,814 15,946 July 1988 22,681 14,840 14,929 g� y p-0-0 CUSTOMER SERVICE Three important structural changes occurred during fiscal 1988 that greatly increased ACC's ability to service the needs of our customers:- the installation of a powerful management information system, 'the installation of a new telephone system, and the renovation of our customer service and engineering offices at 519 W. State St. The new management information system tracks a wide range of activities at ACC, including installation scheduling, service calls, service levels, and financial performance. The new phone system allows ACC to monitor access to our customer service representatives, on -hold time, if any, length of calls, and time of day, among a range of information. Both upgrades represent the second of their kind in the last three years, significantly improving our ability to monitor our responsiveness to our customers. The building renovations provide our customer service representatives with improved workspace, while the renovations to our engineering offices will allow our technical staff to work in facilities designed specifically for their needs for the first time in the system's history. The renovations also include work on a newly -acquired building at 612 W. Green St., which will house our public access facility. REPAIR AND MAINTENANCE ACC has had a strong. record of solid technical performance within our system, and 1988 continued that tradition. ACC responded to 3,878 customer requests for repair during the year, a decrease 1,248, or 24.3 percent, from 1987's level. During the past four years, ACC has reduced customer requests for repair by 56.6 percent -- from 8,930 'to 3,878 " through aggressive preventative maintenance and upgrading of our plant. In the City of Ithaca ACC responded to 1,408 requests for repair, a decrease of 18.8 percent from 1987. The slightly poorer showing within the City can be attributed largely to service calls generated by ACC's rebuild. Service call activity is usually slightly higher during a rebuild as crews move and replace old .plant and equipment, causing some level of signal degradation in isolated areas. A summary of repair and maintenance activity can be found on the following page. TOTAL SERVICE CALL REPORT JULY 1, 1987 — JUNE 30, 1988 ***************************************************************** FRANCHISE FRANCHISE NAME TOTAL CALLS NUMBER ***************************************************************** 1 CITY OF ITHACA 1408 2 TOWN OF ITHACA 611 3 VILL. OF CAYUGA HEIGHTS 167 4 TRUMANSBURG 84 5 VILL. OF CANDOR 50 6 TOWN OF CAROLINE 79 7 VILL. OF LANSING 206 8 TOWN OF DRYDEN 413 9 TOWN OF NEWFIELD 147 10 TOWN OF LANSING 216 11 ULYSSES 59 12 TOWN OF DANBY 63 13 VILL. OF NEWARK VALLEY 27 14 VILL. OF GROTON 125 15 TOWN OF GROTON 36 16 VILL. OF DRYDEN 78 17 VILL. OF FREEVILLE 21 19 TOWN OF CANDOR 59 20 TOWN OF NEWARK VALLEY 29 TOTAL 3878 ***************************************************************** 1 519 West State Street Ithaca, New York 14850 607-272-3456 acapto 1050 .9s', J — R , a — \L3O H lo,000 r)y t,,000 _ 4, 000 — 2,000 Re P6tfa- CLL, kc -n v Ty An,��A`�1�� •301.4462_1-' .',r'ttce, Ca Os. fggy V\ C (1% 9r7 V:138 Tr5 c Q.I `��-r LINE EXTENSIONS ACC continued its aggressive approach to line extensions during fiscal 1988, adding almost 15 miles of new cableand almost 600 new passings to our cable system. Traditionally, ACC has built line extensions when an area would provide us with at least 35 passings per mile. During the past three years, we have relaxed that standard and will now often build areas with 25-30 homes per mile when it appears likely additional homes will be built in the area. A summary of line extension work undertaken in the system begins on the following page. JULY 1, 1987 —'JUNE 30, 1988 LINE EXTENSIONS DATE FRANCH. LOCATION FOOTAGE PASS 8/05/87 1 301 1/2 EDDY ST 85 3 AERIAL 10/20/87 1 GILES & STATE ST E 125 1 AERIAL 2/01/88 1 DRYDEN RD/COLLEGE AV 42 2 UG 6/01/88 1 VALENTINE APTS. 619 54 UG TOTALS CITY OF ITHACA 871 60 7/21/87 2 DANBY RD 1029 12 UG 8/26/87 2 125 VALLEYVIEW RD 197 1 AERIAL 10/02/87 2 GRANDVIEW 3000 54 UG 10/06/87 2 WESTVIEW LN 2301 38 UG - 10/16/87 2 MITCHELL ST/BLACK OAK 400 .8 UG 11/10/87 2 COY GLEN RD 1195 1 AERIAL 12/15/87 2 WHITE TAIL DR 1117 20 UG 1/26/88 2 CODDING/GERMAN CROSS 972 4 AERIAL 3/03/88 2 SEVEN MILE DR 275 4 UG 3/28/88 2 NELSON/TROY RD 4655 18 AERIAL 3/28/88 2 610 ELMIRA RD 715 1 AERIAL 4/05/88 2 CODDINGTON RD 732 3 AERIAL 4/11/88 2 WHITTED RD 614 2 AERIAL. 6/01/88 2 WOOLFE LN 2800 24 UG 6/01/88 2 HOVANEC 3166 24 UG 7/01/88 2 SEVEN MILE DR 1000 14 UG TOTALS TOWN OF ITHACA 24,168 228 7/07/87 4 KING ST 889 3 AERIAL 7/07/87 4 PROSPECT ST 300 1 AERIAL TOTALS TRUMANSBURG 1189 4 7/21/87 6 BROOKTONDALE RD 295 4 AERIAL 12/29/87 6 MIDLINE RD 435 24 UG 4/07/88 6 PHEASANT WALK N 190 2 AERIAL TOTALS CAROLINE 920 30 1 519 West State Street Ithaca, New York 14850 607-272-3456 DATE FRANC. LOCATION FOOTAGE PASS 7/07/88 8 23 MINNEAH RD 600 3 AERIAL 7/27/88 8 FERGUSON RD 1320 1 BOTH 8/21/87 8 BEAM HILL RD 1600 5 AERIAL 10/01/87 8 HILTON RD 705 10 UG 10/09/87 8 GENUNG RD/ELLIS HOLLOW CREEK RD 1437 6 BOTH 10/20/87 8 WEST DRYDEN RD 1760 9 AERIAL 11/10/87 8 KEITH LN 533 2 AERIAL 11/12/87 8 1133 DRYDEN RD 448 4 AERIAL 12/31/87 8 CHAFFEE RD 639 3 AERIAL 1/03/88 8 HUNGERFORD RD 2848 10 UG 5/02/88 8 HANSHAW/LOWER CR RD• 235 2 AERIAL TOTALS TOWN OF DRYDEN 12,125 55 8/17/87 9 BABBLING BROOK 182 11 AERIAL " 1192 UG TOTALS NEWFIELD 1374 11 8/31/87 10 DRAKE RD 1825 9 AERIAL 9/11/87 10 COLLINS RD 300 1 UG 9/21/87 10 CRAFT RD 1088 9 UG. 10/06/87 10 LAKE SHORE RD MYERS 330 1 AERIAL 10/12/87 10 EAST SHORE DR 274 1 AERIAL 10/14/87 10 RIDGE RD 3677 20 AERIAL 11/04/87 10 DUBLIN RD 2860 14 AERIAL 11/12/87 10 87 FARRELL RD 500 3 AERIAL 1/05/88 10 EAST SHORE DR 400 8 UG 4/05/88 10 CHERRY RD 4107 11 AERIAL 4/05/88 10 TRIPHAMMER TR 200 3 AERIAL 5/01/88 10 HUNTER APTS. 400 18 UG TOTALS TOWN OF LANSING 15,961 98 519 West State Street 2 Ithaca, New York 14850 607-272-3456 DATE FRANC. LOCATION FOOTAGE PASS 8/05/87 11 DUBOIS/INDIAN CR 13000 69 AERIAL 8/20/87 11 COLD SPRINGS RD 1151 . 8 AERIAL 10/14/87 11 1606 TRUMANSBURG RD 243 1 AERIAL TOTALS ULYSSES 14,394 78 8/26/87 12 CODDINGTON RD 974 3 AERIAL TOTALS DANBY 974 3 7/09/87 16 LAKE RD 212 0 AERIAL 10/01/87 16 HILTON RD 140 0 UG 3/01/88 16 WELSLEY DR 255 2 UG TOTALS VILL. OF DRYDEN 607 2 9/11/87 19 RT 96B 2001 1 UG 10/02/87 19 HEISEY RD 262 1 AERIAL 11/10/87 19 RT 96B/CRONK RD -220 . 1 AERIAL 11/10/87 19 WILLSEYVILLE RD/ CODDINGTON RD 667 4 AERIAL TOTALS WILLSEYVILLE 3150 7 10/01/87 20 MURPHY RD 1500 10 UG 10/26/87 20 FARRELL ESTATES 315 4 UG 12/09/87 20 RT 38 RD*2 . 200 2 AERIAL TOTALS TOWN OF NEWARK VALLEY . 2,015 16 UG 519 West State Street. 71,14%. 59Q 3 Ithaca, New York 14850 Aueracge. LI O /Mile- - 607-272-3456 SYSTEM REBUILD There are actually two types of rebuild now occurring in our system, a total rebuild of the entire system and the ongoing rebuild needed to maintain our system or to comply with state and local regulations. During fiscal 1988 ACC rebuilt 7.6 miles of plant, either replacing worn plant to keep the system operating or to move our plant for some reason. Typically, we are asked to move plant when a road is overhauled, when telephone or electric utilities move poles, or when new housing construction occurs in an area. A listing of regular system rebuild activities can be found on the following page. Our total system rebuild began in 1988, and it's best to think of this project as the creation of a totally new cable system for our customers.• By June 30, we had completed' preliminary work within the east and south parts of the City of Ithaca. Customers within the City of Ithaca will be fully connected to the new system by June 1, 1989, with the balance of our customers coming on line during 1989, 1990 and 1991. A map showing the areas and schedule of the City of Ithaca of Ithaca portion of the rebuild can be found on page 14, and an approximate timetable for other portions of the rebuild can be found on page 15. COMMUNITY SERVICE One of our most important responsibilities is to be a good neighbor within our community. As a media company, we recognize that this means not only community involvement but the use of our powerful communications tool to inform our customers and our community about events and issues. During fiscal 1988, ACC produced and cablecast public service announcements for such organizations as the United Way of Tompkins County, Salvation Army, the Tompkins County AIDS Task Force, Boy Scouts of America, and the .Ithaca Centennial Commission for cablecasting on CNN, ESPN, MTV, USA Network and NewsCenter 7. In addition, public access volunteers prepared and cablecast a large number of public service messages on Cable 13. The "Community Bulletin Board" has featured several hundred public service announcements during the year. We're looking forward to even greater ability- to provide this important service as we upgrade the. equipment involved during 1989. ACC has also been directly involved in a number of community organizations. Three members of our staff serve on various committees or the United Way of Tompkins County. General Manager Mike Withiam and NewsCenter 7 anchor Molly Cummings both chaired committees during Ithaca's Centennial celebration, and Withiam is a member of the Tompkins County Chamber of Commerce Board of Directors. Other important community activities undertaken by ACC or ACC staff during 1988 include: ** We have continued our successful sponsorship of the Holiday Food Drive, quadrupling our success rate during the winter of 1987 to collect more than 4,000 units of food. ** We sponsor the Time Education program in two area schools, providing copies of Time Magazine and supporting educational tools to teachers and students. ** We undertook a major initiative to support the Tompkins County Day care Council, cablecasting a series of training tapes for Day Care providers on channel 7. In addition, we worked with local merchants to provide VCRs and television sets to a number of area Day Care Centers and provided free basic service to some 16 centers. REBUILD JULY 1, 1987 — JUNE 30, 1988 DATE FRANCH. LOCATION FOOTAGE 10/29/87 1 BLAIR ST 161 AERIAL 10/29/87 1 BUFFALO ST E 588 AERIAL 11/10/87 1 GILES ST 813 AERIAL TOTALS CITY OF ITHACA 7/07/87 2 KING RD E & TROY RD -624 AERIAL 7/07/87 2 DUBOIS RD 2765 AERIAL 8/14/87 2 KING RD E 1506 AERIAL 10/15/87 2 ITHACA COLLEGE 586 UG 2/01/88 2 ROUTE 13 289,2 AERIAL 3/28/88 2 NELSON RD 2207 AERIAL TOTALS TOWN OF ITHACA 10,580 6/27/87 6 BROOKTONDALE RD 3959 .AERIAL TOTALS CAROLINE 3959 1 519 West State Street Ithaca. New York 14850 607-272-3456 DATE FRANCH. LOCATION FOOTAGE 6/01/87 6/27/87 6/27/87 7/21/87 8/05/87 10/28/87 . 11/02/87 12/15/87 8 8 8 8 8 8 8 8 1871 HANSHAW RD #52 — #61 RT 13 — GEORGE RD 11 BAKER HILL RD ELLIS HOLLOW RD RT 366 VARNA SNYDER CT TURKEY HILL RD RT 13 — JOHNSON RD 188 S 332 380 600 8636 477 2389 622 UG • AERIAL AERIAL UG AERIAL AERIAL AERIAL AERIAL TOTALS TOWN OF DRYDEN 13,624 12/15/87 4/25/88 9 9 SCHAFFER RD SHELTER VALLEY 1670 577 AERIAL 'AERIAL TOTALS NEWFIELD 2247 6/27/87 8/04/87 1/04/88 10 LANSING STA RD 10 DRAKE RD 10 DRAKE RD 426 6961 300 AERIAL AERIAL AERIAL TOTALS TOWN OF LANSING 7687 10/12/87 13 BRIDGE ST — MAIN ST 85 AERIAL TOTALS VILLAGE OF NEWARK VALLEY 578 5/04/88. 14 PERUVILLE RD 578 AERIAL TOTALS VILLAGE OF GROTON 578 519 West State Street Ithaca, New York 14850 607-272-3456 SIIEOATON 00 CItIE IA 1_j\ -OR ..... -_, LANSING Vh.LAGE UPro::: /. 1,IITHACA._ l ()V/ 'Id m' MI II0116 S 1,:.0 II II 1J ,Jr. 11. S,l:,nd b It. , LEiUIII' U %� t i WIf1I IIOOP .. _- UU• � 171111 1111111' Ilii. SIMASBURY " U0. I�IIIIAl1UY1710L• 0n. ILI___CHRI510PHER_, LA. \ _ W ,Irum; 15111 . •:�i - •I CN. I4. 7 I• .I • IeA4'. -.Ili i II I�Yv 1111 Il I 11 7 TYLER R0. 111G IGAT (Y'llml Poral, SPRUCE LEX CAYUGA P.AIIK rin• .SIIEIf/ irEWAI1T a PARI< 5) coo 51111 PL. BIRO SANCTUARY CAYUGA HEIGHTS. J� IBLULGII, MUNICIPAL GOLF COURSE HTS ,/ 11E1511 IS 1116111.ANII AVE. �• pp vrI •� 111 _' . '��Y.nlll I .OM1 9 I�v 122 1.111 :I 1 A C0/UVIII( u u (/N/V/ /C:// I. 7 SUNRISE 110PPE0 COIIRI 1 -1MCDANIE LS i_. -,PARK St' ELM CLI,I LONA.' :�,ritYidb� rry Street dustrial Park ESI LAO on JIInntinA7:IIIII(111• . Vlf:' l� rlu IL1l'. .,.rETb I111NF, 611 VILW dr•Flil.l( VI 1j . •.. 1Y. COIIIME0CIAL • 17//,10,1 )CM.)11! ....nTWWI /,9P S I � OMI•ILIL�\\ Copylight.T11E NA1 IONAL SURVEY, 1982 City of Ithaca T. Ulysses Trumansburg V. Newark Valley Cayuga Heights V. Lansing T. Dryden V. Dryden Freeville V. Groton 'T. Groton T. Lansing Caroline Danby V. Candor T.Candor V. Newark Valley T. Newark Valley REBUILD TIMETABLE Phase I Phase IIA Phase IIB Phase III Winter 1989 Late winter 1989 Early spring 1989 Late spring 1989 Summer Summer Summer 1989* 1989 1989# Fall 1989 Fall 1989 Winter Winter Winter 1990 1990 1990* Spring 1990 Spring 1990 Summer 1990 Fall 1990 Fall 1990 Winter 1991 Winter 1991 Spring 1991 Spring 1991 * Franchise renewal pending # Upgrade only; franchise renewal planning Community Service (continued) ** ACC also sponsored a local "Lifesaver Tag" program, distributing thousands of identification tags that could be tied or sewn onto children's clothing to help identify a lost child. ** ACC employees Regina Deschere, Fran Wright and Cathy Sincebaugh were all recipients of Time Volunteer Grants through a program which encourages employees to become involved in local organizations. Deschere and Wright co- sponsored a gift to the West Hill Day Care Center; Sincebaugh sponsored a gift to the Newfield High School Sports Booster Club. ** ACC sponsored the annual sale of flares in conjunction with the Women's Community Building, a part of Ithaca's July 4 celebration. ** We were co-sponsor of the fireworks display that served to close this year's Ithaca Festival at Stewart Park. ** We also made a number of major contributions to community organizations. Among them were the Tompkins County Arts Council, Tompkins -Cortland Community College, Tompkins County Cooperative Extension, the Tompkins County Chamber of Commerce Building Fund, and the Women's Community Building. LOCAL PROGRAMMING ACC has been heavily involved in local •programming beyond public access for some time, and continues to offer one of the only locally, -produced cable news program in the nation, News Center 7. Cablecast live each weeknight, with taped repeats each. NewsCenter 7 is Ithaca's only source for local television news. The program was one of five finalists for a National ACE award =- cable's equivalent of an Emmy Award, and continued to receive high viewership and satisfaction ratings from our customers. ACC also produced a number of local programming specials, including extensive local election coverage, live coverage of the opening event of the Ithaca Centennial Celebration (with huge_ contributions from Ithaca College), special Ithaca Festival programming, programming for the local Day Care Council, and other specials. PUBLIC ACCESS An important part of ACC's local programming commitment is public access television. During 1987-88, activity levels continued to increase dramatically and planning for a major upgrade to the facility during fiscal 1989 was undertaken. In addition to the above activities, the community access studio provides a number of other continuing services for access producers and members of the Tompkins County Community at large: ** The production facilities are available to producers 60 hours per week, with separate facilities for studio production, editing, tape viewing/logging and cablecasting playback; ** About 20 hours of programming per week is cablecast from the access studio (about another 15 hours per week is cablecast from the T.C. Public Library and Ithaca College) - ** Access staff produce 3 - 4 Our Community programs .per month plus Public Service Announcements with representatives of non-profit organizations from all over Tompkins County; ** An electronic Community Bulletin Board is available to all non-profit groups for events listings; ** Monthly free .video training courses and tutorial sessions are offered to all County residents; ** Access staff are available to speak to community groups and arrange tours of the access facilities; Other points of interest relating to public access include: ** Over the year, the community access studio has begun to reach its saturation point in terms of facility usage, particularly in terms of the editing suite. Plans have been ongoing throughout 1988 to incorporate our present levels of usage into the plans for the upgraded access facilities. ** Volunteers' concerns have been solicited and incorporated into the planning process. Technical concerns included requests for additional editing facilities, improvements in the audio and video quality of equipment in the studio, improved sets, props and lighting, and accommodation to the needs of volunteers who bring in VHS material to include in access programs. Space concerns included requests for a Public Access (continued) separate area to hold production meetings and view tapes. Organizational concerns included requests for more official avenues of communication between volunteers and access management, as well as ways to incorporate more volunteer input into decisions affecting the studio. ** The technical and space concerns raised by volunteers have been addressed through the plans for the reconstruction of the access facility. These plans have become even more exciting as the opportunity developed to move the expanded, renovated studio into its own building adjacent to the cable company, a move planned for the end of the year. A large portion of the $165,000 set aside under the new franchise for PEG access will be used to upgrade the equipment within the new facility. These improvements, including new cameras and audio equipment, set "luxuries" like 2 cycleramas and an expanded lighting grid, should drastically improve the quality of access productions. The construction plans include provisions for a meeting/viewing room, second edit suite, storage closets for sets and portable kits, bathrooms with makeup areas, and parking. ** Finally, we have worked very hard to narrow the communication gap between the company and volunteers, setting in place a number of 2 -way channels for communication. The center of the communication effort has been a bi-monthly (now monthly) newsletter, CABLE 13 News,. with a circulation of about 150. In it, (and a few "Extra" mailings) we have kept volunteers informed of the changes ahead, solicited input on the plans, addressed suggestions left in the access Suggestion Box, let everyone know the timeline within which the changes will be taking place and the points at which plans will be submitted to the public for comment and review. In addition, public meetings between ACC staff and volunteers will give those interested in more direct input an opportunity to express their views about the coming changes directly. Producers have continued to win grants and other sorts of recognition in 1988: ** Frances McKenzie was awarded a grant of $1,050 from the United Arts Fund to begin production of a documentary of her belly -dancing troupe. ** Debbie Freedman, producer of Take 1, was awarded a grant of about $1,000 from the Media Bureau in New York City to continue work on her program. Public Access (continued) ** Risley Hall at Cornell funded a student production for community access of a 3 -part science fiction thriller. ** Deep Dish TV selected 3 programs by More Than the News for inclusion in its 1988 collection of excerpts 6E—access programs from around the country. The programs were transmitted by satellite to access centers nationwide. ** A documentary on lesbian sexuality was added to the video library of a research foundation in New York City. ** ACC contributed staff efforts to national A.C.E. awards submissions ** Local A.C.E. Awards Submissions/Judging ** 4th Annual Local A.C.E. Awards Ceremony, Ramada Inn ** Set of 5 Our Community programs produced with American Cancer Society representatives, for National Cancer Month - ** Address to and tour for Senior Citizen Council reps ** Special A.C.E. Awards program on CABLE 13, featuring interviews with A.C.E. award winners and clips of winning entries. ** Expanded TV listings for access detailed program descriptions in Ithaca ** Ithaca Festival coverage by access programming produced and cablecast. ** Viewing/logging facilities added ** Volunteer4of-the-Month program started: each month a newsletter feature article, and a CABLE 13 Video Festival cablecasting night (with a selection of programs by a volunteer producer, together with behind the scenes interviews on "the making of" the selected access productions) help let volunteers get to know one another's work. programs, Journal staff: including 4 hours of CABLE ADVERTISING AND PRODUCTION During the past four years, ACC's Cable -Ads operation has established itself as an important part of the advertising picture in Tompkins County. Cable=Ads offers its customers locally targeted television advertising at affordable prices, allowing local businesses to use the power of television to promote their products and services. Cable -'Ads makes advertising available on CNN, ESPN, MTV, USA Network and NewsCenter 7. Working closely with Cable -Ads is ACC's commercial production group, Video Image Productions (VIP). Besides creating 30- and 60 -second commercials for Cable -Ads, VIP produces videotapes for training and sales presentations and produces commercials for other area cable operators. Audited Financial Statements American Community Cablevision Division of American Television and Communications Corporation. June 30, 1988 EW Ernst&Whinney AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION Audited Financial Statements June 30, 1988 Audited Financial Statements Report of Independent Auditors 1 Statement of Assets, Liabilities and Net Assets 2 Statement of Revenues and Expenses and Changes in Net Assets 3 Notes to Financial Statements 4 EW Ernst&Whinney Report of Independent Auditors The Board of Directors American Television and Communications Corporation Englewood, Colorado 4300 Republic Plaza Denver, Colorado 80202 303/534-4300 We have audited the accompanying statement of assets, liabilities and net assets of American Community Cablevision Division of American Television and Communications Corporation as of June 30, 1988, and the related statement of revenues and expenses and changes in net assets for the year then ended. These financial statements are the responsibility of the Division's management. Our responsibility is to express an opinion on. these financial 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1 to the financial statements, American Community Cablevision is one of several divisions and subsidiaries of American Television and Communications Corporation, and has material transactions with its affiliates. - In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and net assets of American Community Cablevision Division of American Television and Communications Corporation at June 30, 1988, and its revenues and expenses and changes in net assets for the year then ended in conformity with generally accepted accounting principles. 61'. 11404"*47_ Denver, Colorado September 22, 1988 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS June 30, 1988 ASSETS Cash --Note 3 $ 201,557 Accounts receivable, less allowance for doubtful accounts of $135,072 65,636 Prepaid expenses and supplies 49,588 Property, plant and equipment, at cost --Note 2: Land, building and improvements Distribution system Vehicles and other equipment Construction in progress Less accumulated depreciation Net property, plant and equipment Franchise costs, less accumulated amortization of $958,634 --Note 2 Other Assets $ 654,896 9,320,232 1,663,902 1,444,267 13,083,297 (5,695,771) LIABILITIES AND NET ASSETS Accounts payable Accrued liabilities Subscribers' advance payments and deposits Net assets --Note 1 See notes to financial statements 2 7,387,526 1,417,405 3,500 $9,125,212 $ 983,209 229,204 313,576 1,525,989 7,599,223 $9,125,212 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS.CORPORATION STATEMENT OF REVENUES AND EXPENSES AND CHANGES IN NET ASSETS Year Ended June 30, 1988 Revenues: Service $4,950,842 Connection and other 936,207 . $5,887,049 Expenses --Notes 1 and 2: Operating and origination 2,604,389 Selling, general and administrative 1,783,684 Depreciation and amortization 946,340 Interest 471.402 Income before charge in lieu of income taxes Charge in lieu of income taxes --Note 5 Net income Net assets at beginning of year Net advances from corporate. office Net assets at end of year See notes to financial statements 3 5 ,805,815. 81,234 21,000 60,234 6,534,876 1,004,113 $7,599,223 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 1988 1. Basis of presentation The Division is principally engaged in the operation of a cable television business. It operates in the City of Ithaca, New York and contiguous areas under nonexclusive franchise agreements which are in effect until 1991. The Divisionhas no separate legal status or existence. Its resources and existence are at the disposal of American Television and Communications Corporation (ATC) management, subject to contractual commitments by ATC to perform certain long-term contracts within the present divisional structure. Its assets are legally available for the satisfaction of debts of the entire corporation, not solely those appearing in the accompanying statements, and its debts may result in claims against assets not appearing therein. It is one of several divisions and subsidiaries of ATC, and transactions and the - terms thereof maybe arranged by and among members of the affiliated group. ATC is an 82% owned subsidiary of Time Incorporated (Time). The Division records charges for selling, general and administrative expenses that are directly associated with it and a portion of the ATC expenses ($451,841 for the year ended June 30, 1988) which are allocated to divisions and subsidiaries based upon subscriber levels. Interest charged to the Division by ATC ($476,924) was computed by multiplying 72.87% of the Division's average net assets (computed using beginning and end of year balances) by the average interest rate (9.27% for the year ended June 30, 1988) on ATC's outstanding borrowings. 2. Significant accounting policies Property, plant and equipment: Depreciation is provided on the straight-line basis over the estimated useful lives of the assets as follows: Building and improvements Distribution system Vehicles and other equipment 10-20 years 8-15 years 4-10 years Franchise costs: The Division has deferred costs incurred to acquire the franchises. Additional costs incurred to renew the franchise have also been deferred. Amortization of franchise costs is provided on the straight-line basis over periods of up to forty years. 3. Restricted cash Cash is restricted in the amount of converter deposits ($185,950 at June 30, 1988). This amount .is held by the Division and is refundable to customers. AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 1988 4. Related party transactions The statement of revenues and expenses and changes in net assets includes charges for programming and promotional services provided by Home Box Office Incorporated, a subsidiary of Time. These charges were based upon customary rates. 5. Income taxes Operating results of the Division are included in the consolidated federal income tax return of Time. In lieu of income taxes, ATC charges the Division an amount which approximates statutory state and federal'income tax rates on pretax income, less investment tax credits (ITC) on current year property additions. For the year ended June 30, 1988, ITC utilized was approximately $18,600 and a provision of approximately $6,300 has been charged for a reduction in basis of certain property, plant and equipment due to investment tax credit utilized. ITC is accounted for by the flow-through method. 6. Leases Rental expense for the year ended June 30, 1988 amounted to $97,607. The Division had no significant noncancelable rental commitments. -5 SCC AV_JRICAN OOivViT\ I"Y CBI 1V"SIOS ANNUAL REPORT FISCAL YEAR 1 9 8 6- 1 9 8 7 AVJRICAN COVVLII 'Y CABT iViSIOi ANNUAL REPORT FISCAL YEAR Oont/en:s Letter from the General Manager 1 Financial Performance 2 Subscriber Growth 2 Customer Service 2-3 Repair and Maintenance 3 Line Extensions and Rebuild 4 Community Service 4 Local Programming 5 Public Access Television/ Cable 13 5-6 Cable Advertising and Production 6 ACC-TVRO 6 Staffing 7 Refranchising 7 Future 7 Audited Financial Statements 8-10 1986-87 Line Extensions 10 Rebuild 1986-87 11 ©1987 American Community Cablevision, 519 West State Street, Ithaca, IdY 14850; 607/272-3456. PHOTO CREDITS: Candid Photo, 6; Regina Deschere, cover, 4, 7; Patricia Reynolds, 5. October 1987 Once each year it proves worth- while to stop and reflect, to look back over the past 12 months to review accomplishments, to look back at long-term trends, and to look ahead to the chal- lenges offered by a future that is, for American Community Cablevision, full of change. ACC enjoyed a particularity success- ful 1987 fiscal year. We continued to improve our programming lineup wherever possible, introducing expanded local programming and adding pay-per-view movies. We further developed our excellent customer service abilities, watched as our aggressive system mainte- nance program again significantly reduced service calls, and con- structed a near -record number of line extensions to reach even more customers. Our community outreach efforts also expanded significantly, and our newer, ancillary business activities —Cable•Ads, Video Image Produc- tions and ACC-TVRO—continued their steady growth. Our financial performance was down slightly during 1987, but only because we invested in system improvements that will provide long-term benefits to our customers. Our decision to postpone a 6.25 percent basic service price increase planned for February had a negative effect on our net income, as did the cost of our refranchising efforts with the City of Ithaca. We also spent a great deal of time planning for the future. A total rebuild of our system will start in 1988, making possible expanded programming offerings and addi- tional services for our customers. A tremendous amount of staff time was devoted to planning for this project during fiscal 1987, and we are anxious to begin work as fiscal 1988 begins. The report that follows is a sum- mary of 12 months of continued growth, improved customer service and satisfaction, and consistent outreach to our customers and our community. (pcie-,_ Michael M. Withiam General Manager 1 �n�ncial -Performance ACC achieved a positive return on investment for the fourth consecutive year during fiscal 1987. ACC's net income was $159,266 during the year, down 43 percent from $280,638 during fiscal 1986. Two primary factors were responsi- ble for the decline in net income: increased investment in system expansion, and ACC's decision to postpone a planned price increase during the second half of the fiscal year. A complete financial report is available in the Audited Financial Statements on pages 8-10. Su bscri Grown Ser Steady growth of basic sub- scribers (1.4 percent) continued throughout the year. Expanded Tier and Premium channel units exceeded basic subscriber growth with 4.7 percent and 1.7 percent growth respectively. The significant decrease in subscribers from April to July, and subsequent increase from July to October in the chart below reflects the annual mi- gration of college students to and from the Tompkins-Tioga county area. Since the expansion of our channel lineup in 1984, when we added two premium channel services and ten basic tier cable services, our basic customers have increasedby nearly 2,500. Subscription to premium services has increased by 76 percent and the number of customers enj oy- ing our Expanded Tier has nearly doubled during that three-year period. Strong customer acceptance of our improved product and service, increased marketing and sales activ- ity, and greater focus on service and sales training with our customer - contact employees have contributed to these gains. Over the next few years we expect to see accelerated growth of Ex- panded Tier and Premium services through further enhancements of our channel lineup during the rebuild of our system, and a focus on increased value of the pay services through new packaging and pricing of our services. Customer Service American Community Cable- vision has made many positive changes towards improved customer service in the past year. In the areas of installa- tion, repair and maintenance of the cable system, we have added personnel to insure timely responses to customer needs. These staff additions have included one repair dispatch representative and two instal- lers. For added customer con- venience, we have instituted specific morning and afternoon appointments for those cus- tomers who need. them. The business office at American Community Cablevision saw many customer -positive changes this past year. Fiscal 1987 was the first full year of cycle billing for ACC custom- ers. We mail invoices in two cycles to even out the number of customers receiving their bills at any one time, making it easier for customers to contact our office with questions. The ability of our customers to reach us by phone is an important aspect of customer service, and we monitor that activity carefully. We estimate that our customers make more than 35,000 calls to ACC each year, and that we make more than 26,000 outgoing calls to reach customers with pre -appointment reminders, service or installation follow-up calls, past due account follow-up, and other customer outreach services. Month Basic Service Expanded Tier Premium. 'Units July'86 October '86 January '87 April '87 July'87 21,800 23,500 24,150 24,250 22,112 13,250 14,925 15,500 15,825 13,869 12,975 14,002 14,675 14,850 13,199 2 The collection procedures for past due accounts have been expanded to include the mailing of three past due invoices and at least one attempted personal phone call from one of our customer service representatives prior to any disconnection of service. We've also made important modifi- cations to our Cable -Watch pro- gramming guide, which is sent free each month to each of our custom- ers. These changes include a more detailed listing of our premium channel offerings, a revised and expanded prime -time grid listing, and listings for the various broad- cast networks available on our cable system. Our technical and front office personnel benefit from on-going training programs in such areas as customer relations, programming knowledge, cable TV and VCR com- patability and of course, training specific to the employees' role in the company. air anc _Maintenance For the third straight year, ACC has also shown a substantial decline in the number of re- quests for repair service. During fiscal. 1987, .ACC responded to 5,126 service requests, a decline of 815, or 13.7 percent, from the previous year. Service requests cover a wide range of activities including drop and cable repair, converter repair, .amplifier repair, customer education and outages. TOTAL SERVICE CALL REPORT JULY 1, 1986 — JUNE 30, 1987 Franchise Franchise Number Name Total Calls 1 City of Ithaca 2 Town of Ithaca 3 Village of Cayuga Heights 4 Trumansburg 5 Village of Candor 6 Town of Caroline 7 Village of Lansing 8 Town of Dryden 9 Town of Newfield 10 Town of Lansing 11 Townofulysses 12 TownofDanby 13 Village of Newark Valley 14 Village of Groton 15 Town of Groton 16 Village of Dryden 17 Village ofFreeville 19 Town of Candor 20 Town of Newark Valley TOTAL 1733 902 237 94 93 88 257 554 186 292 73 75 56 159 45 93 33 115 41 During the past three years, ACC's aggressive preventive maintenance and testing program has helped reduce the number of requests for repair from 8,930 in 1984 to this year's 5,126. This decline represents 3,804 fewer requests for repair, or a 42.6 percent decrease over three years. It is important to note that this repair record has been established during a period of steady growth for ACC. During the same three-year period that service requests dropped 42.6 percent, our average customer base increased by almost 14 percent. Another way to look at this perform- ance record is service requests per customer. In 1984, ACC received one service request for every 2.3 custom- ers; in. 1987, we received one request for every 4.6 customers. 5126 The following chart illustrates this improvement quite graphica y. • — AVERAGE NUMBER OF SUBSCRIBERS ❑ — NUMBER OF SERVICE REQUESTS 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 1 9 8 4 1 9 8 5 1 9 8 6 1 9 8 7 The decline in service calls canbe easily measured in the ratio of service calls to basic customers: Fiscal 1984: 1 service call per 2.31 customers Fiscal 198S: 1 service call per 3.0 customers Fiscal 1986: 1 service call per 4.89 customers During the fiscal year endedJune 30, 1987, ACC also received written correspondence from customers which included 78 letters regarding billing concerns, 10 letters regarding channel lineup changes, 15 letters regarding our programming guide and 65 letters on various general cable issues. 3 _ ne Extensions and_ Re DLi t - In an effort to bring cable television into more homes, ACC has maintained an aggressive approach on line extensions of our cable plant. Traditionally, ACC has built line extensions when an area would provide us with at least 35 passings per mile. During the past two years, we have relaxed that standard somewhat and will now build areas with 25-30 homes per mile when it appears likely addi- tional homes will be built in the area. Page 10 lists all of our line extension activity during fiscal 1987. ACC's plant maintenance program includes the rebuild of many small portions of our system. We often replace segments of our plant when it becomes worn. Other activities that result in rebuild include highway construction, building work, or plant upgrades to support line extensions. Page 11 lists our rebuild activity for fiscal 1987. One of the many ACC bucket trucks, gassed up and ready to go. Above is our new satellite receiver, installed to collect additional programming. Community Service One of business' most important responsibilities is to be a good neighbor in the community. As a media company, ACC provides its neighbors with the means to convey vital health, cultural, and service announcements. During the fiscal year, ACC pro- ducedand cablecast public service announcements for Such organiza- tions as the United Way of Tompkins County, Salvation Army, and the Ithaca Opera Society. Also during the period, Cable 13 aired an addi- tional 85 announcements produced by community access volunteers. The "Community Bulletin Board" has featured several hundred public service announcements during the year. ACC receives such a large vol- ume of information that occasion- ally we exceed our abilities to air each notice. With the coming system rebuild however, we will expand our capacity for announcements. Conversations with customers, letters received, and periodic sur- veys have provided us with valuable information for us to gauge our service to the community. It's been heartening to receive such a large volume of appreciative letters about our Cable 13 programming and Cable NewsCenter 7 reporting. ACC made efforts to support a num- ber of community organizations during the fiscal year. With the assistance of the Kitchen Cupboard and Loaves & Fishes, ACC collected over 1,000 cans of food for those in need during the Holiday Season. Our production unit, Video Image Productions, produced the United. Way of Tompkins County's broadcast campaign commercial spots, and our CableAds department provided $5,800 worth of commercial time to cablecast the spots. The company also joined the City of Ithaca's Cen- tennial Commission to help prepare for the milestone birthday year. The education of our youth remains an ACC priority. The company spon- sored the TIME Education Program in two community schools—the TIME Education Program includes a one year's subscription to TIME magazine for each social studies student and weekly teacher's guides to further stimulate student knowl- edge of world and national events. Major recipients of ACC donations this fiscal year include the Tomp- kins Cortland Community College Foundation, Tompkins County Arts Council, and the Women's Commun- ity Building. The donation for the Women's Community Building in- cluded a video to promote a fund- raising campaign. 4 Local Progr • Or CABLE NEWSCENTER 7. When it premiered July 1,1986, Cable NewsCenter 7 became the only live, local news program pro- duced by a cable television company in upstate New York, and remains one of a very few cable -produced live news pro- grams in the nation. In its first year of operation, Cable News - Center 7 established itself as a reliable news source within the community and expanded its coverage to include live cable - casts at both 6 and 11 p.m. each weeknight A recent survey ranked the program as the second -most watched nightly newscast among regular news view- ers in our community, just half a percentage point behind the leader, and gave the program high marks for its coverage of local issues. This is a great achievement for our news team, given the fact that on our 12 -channel basic service we carry ten broadcast -signals, all with nightly news programs. In addition to Cable NewsCenter 7, ACC produces local public affairs programming. "Our Community" highlights community service organizations; "For the People" features discussion on local politi- cal issues; and "NewsForum 13" serves as a "Meet the Press" -style interview show. Molly Cummings and Rob Jason, co-anchors of the Cable NewsCenter 7 week- nightnewsprogram, the only cable TV -produced news show in upstate New York. Public Access Television/ Cable 13 Our community, with its strong sense of spirit, has motivated over 200 organizations and civic groups to become involved in the production of local programming through ACC's public access studios. During 1986-87, the access studio dramatically increased activities on all fronts: • cablecasting hours doubled • the number of active volunteers using the facility each month and the number of new shows produced each month also doubled • our long-standing training pro- grams were expanded to include regular monthly training courses with special seminars on advanced topics • a vigorous advertising campaign was put in place, highlighting special proj ects such as the Holiday Food Drive, undertaken in coopera- tion with other ACC departments. The number of volunteers and vol- unteer productions continued to grow throughout the year. During the fall of 1986, more than 40 new productions per month premiered on Cable 13. As this fiscal year came to a close, the number of new produc- tions rose to over 60 per month. Similarly, the number of active volunteers per month, which in- creased from 50 to 100 last fall, averaged 150 this spring. (There is now a pool of over 500 trained public access volunteers in the community.) Volunteers used 60 percent to 73 percent of the approximately 450 hours per month of studio and edit- ing time available; about 100-120 hours of studio time and 200 hours of editing time is used by volunteers every month. A number of special events were undertakenby Cable 13 this spring. April's third annual Awards for Cable Excellence (AC.E.) were special in that a large number of access volunteers entered the com- petition and were recognized for their work. In 1986, only three access -produced programs received awards, while eight outside -access (Ithaca College and Tompkins County Library) productions were honored. This year, 18 volunteer productions were entered; seven awards went to public access and six to non -access producers. 5 The first Upstate Media Conference was held in May at Cornell Univer- sity's Johnson Art Museum and co-sponsored by Cable 13. The well - attended meeting provided a fine opportunity for volunteers to meet other videomakers here in Ithaca and in the surrounding region. Public access volunteers continue to send their work outside of our community for grants, contests, festivals, and to other access centers. • Cortland Access Festival, March 1987, included three tapes produced at Cable 13, and one pro- duced at Ithaca College. One Cable 13 entrant won third place. • Third International Women's Day Festival and Public Access TV Show, Boston, March 1987, one Cable 13 tape represented. The program was an episode of `Bad TV," a series which can nowbe found in the libraries of the Experimental TV Center, Owego, NY; the Media Bureau, New York City; and RAD TV, in California. • The Hometown USA (NFLCP) Award for Innovative Program- ming, May 1987, was won by a Cable 13 production. The Most Creative Series was won by Deep Dish (in- cluding one segment from an Ithaca volunteer). These awards included prizes and national distribution. • Ithaca Festival, June 1987, Mixed Media event at Cinemapolis included seven access productions. In sum, there are many more com- munity members involved in public access than ever before. Community members now spend an aggregate of 1200 hours per month making com- munity television, versus only 200 hours per month two years ago. 1987ACE winners and friends: (standing, left to right) Chris Sperry, Ian Macintosh, Chris Osborn, Robin Wickman, Clemens Adler, Jacqueline Sawyer, Lain Goldring, Mary Jo Dudley, Laurel Hecht, Eloise Brush, Mary Milne, Gossa Tsegaye, Gene Ira Katz, and Terry Harbin. (Seated, left to right): Lauren Stefanelli, George Spisak, Lisa Cramer, and Rick Lawrence. Cale Ac Ver-Jising enc_ Production During the past two years, ACC has launched a number of new sub businesses, among them Cable•Ads and Video Image Productions. CABLE -ADS makes possible afford- able television advertising targeted to specific local audiences. Cable•Ads serves its customers by working effectively to build traf- fic for local retailers. Local adver- tisements appear on Cable News - Center 7, ESPN, CNN, MTV, and USA Network. Working closely with Cable• Ads is ACC's production unit, VIDEO IMAGE PRODUCTIONS. Besides creating 30- and 60 -second commer- cials for Cable•Ads, Video Image Productions produces industrial videotapes for training and sales presentations and produces com- mercials for other area cable op- erators. VIP was formed in late 1986. ACC -TYRO Service to Satellite Dish Owners. Many residents of rural areas where cable is not economically feasible have relied upon their backyard satellite dishes to bring clear sat- ellite television signals to their homes. When cable programming services began scrambling in Janu- ary 1986 to prevent unauthorized reception of their product, ACC respondedby offering dish owners a subscription service and decoder unit at a fair monthly rate, making reception of the scrambled signals possible. More than half of the dish owners in our service area have taken advantage of ACC-TVRO service. We presently serve over 200 customers with more than 600 programming units. 6 Sa-ing ACC continued to serve the community as an important employer during fiscal 1987, adding 10 full-time and three part-time positions. ACC em- ploys 72 people, 60 full time and 12 part time, and expects to add an additional 7 to 10 positions during the coming fiscal year. The staff additions included two installers, a second service dis- patcher, one local programming assistant for Cable 13, two produc- tion assistants for Video Image Productions, and four full-time and three part-time positions for Cable NewsCenter 7. ACC's management structure saw change during the spring of 1987. In April, Mike Withiam replaced Georgia Griffith as general manager. Withiam, an Ithaca native, had been the operations manager at ACC for two years before being promoted. Elaine Jones replaced Withiam as operations manager, bringing with her more than six years of cable television experience from four New Jersey cable systems prior to joining ACC. ACC also consolidated its manage- ment structure during the spring. Neal Rogachefsky, marketing manager for the past three years, gained responsibility for ACC's Cable•Ads and TYRO satellite dish service. Julie Fox, news director for the past year, assumed responsibil- ity for all video -related services, including Cable NewsCenter 7, Cable 13, and Video Image Produc- tions. Reporting to Fox are Molly Cummings and Rob Jason, Cable NewsCenter 7 co-anchors; Gene Ira Katz, public access coordinator; and John Woods, manager of Video Image Productions. Michael Brand, one of the new ACC installers added to our technical staff. Pat Hourigan, chief engineer for the past five years, and Carolyn Herrewyn, office manager for the past six years, continue in their roles, focusing on ACC's primary cable business. Regina Deschere joined the management team as public affairs director. Re anc "11 ing Another important focus of our activity during fiscal 1987 was the attempted negotiation of a renewed franchise with the City of Ithaca. That process, as this report was prepared, has reached an impasse and appeared headed toward formal discus- sion under the provisions of the Cable Communications Policy Act of 1984. Our negotiations with the City of Ithaca are the first of what will be a series of proposed franchise re- newals and/or extensions with the various municipal governments within our service area. During the next three years, more than one-half of our current operating franchises expire. Future The next three years hold great challenges for all of us at ACC. We willbe totally rebuilding our cable system during that period, expanding our channel capacity from 25 to 60 channels. This ex- pansion will allow us to provide a much wider range of program- ming and information services. This project will require us to contact every one of our customers to explain the changes they will see in their cable service. The extra workload means additional staff, expansion of our office space, and, most likely, new billing and tele- phone systems. The technical changes will mean new and even more extensive training programs for our staff, even more constant customer communication, and an even greater focus on our customer service goals. 7 Auditec_ ThanciaI Statements AMERICAN COMMUNITY CABLEVISION Division of American Television and Communications Corporation JUNE 30, 1987 AUDITOR'S REPORT Ernst & Whinney 4300 Republic Plaza Denver, Colorado 80202 303 /534-4300 The Board of Directors American Television and Communications Corporation We have examined the statement of assets, liabilities and net assets ofAmerican Community Cablevision Division ofAmeri- can Television and Communications Corporation as of June 30,1987, and the related statement of revenues and expenses and changes in net assets for the year then ended. Our exami- nation was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered neces- sary in the circumstances. As described in Note 1, .American Community Cablevision is one of several divisions and subsidiaries of American Television and Com- munications Corporation, and has material transactions with its affiliates. In our opinion, the financial statements referred to above present fairly the assets, liabilities and net assets of American Community Cablevision Division of .American Television and Communications Corportion at June 30, 1987, and its revenues and expenses and changes in net assets for the year then ended, in conformity with generally accepted accounting principles applied as described in Note 1 and in a manner consistent with that of the preceding year. Denver, Colorado August 28, 1987 8 STATEMENT OF .ASSETS, LIABILITIES AND NET ASSETS Year Ended June 30, 1987 .ASSETS Cash—Note 3 Accounts receivable, less allowance for doubtful accounts of $74,151 Prepaid expenses and supplies Property, plant and equipment, at cost—Note 2: Land, building and improvements Distribution system Vehicles and other equipment Construction in progress $ 482,502 8,720,460 1,279,160 123,149 10,605,271 Less accumulated depreciation (4,854,637) Net property, plant and equipment Franchise costs, less accumulated amortization of $881,729—Note 2 Other assets $ 242,639 108,803 59,630 5,750,634 1,377,932 3,500 $7,543,138 LIABILITIES .AND NET .ASSETS Accounts payable Accrued liabilities Subscribers' advance payments and deposits Net assets—Note 1 $ 140,557 467,421 400,284 1,008,262 6,534,876 $7,543,138 STATEMENT OF REVENUES .AND EXPENSES AND CHANGES IN NET .ASSETS Year Ended June 30, 1987 Revenues: Service Connection and other Expenses—Notes 1 and 2: Operating and origination Selling, general and administrative Depreciation and amortization Interest $4,592,877 938,211 2,114,266 1,654,504 1,081,947 383,105 Income before charge in lieu of income taxes Charge in lieu of income taxes—Note 5 Net income Net assets at beginning of year Net repayment of advances from corporate office Net assets at end of year NOTES TO FINANCIAL STATEMENTS June 30, 1987 1. BASIS OF PRESENTATION. The Division is principally engaged in the operation of a cable television business, including premium programming. It operates in the City of Ithaca, NewYork and contiguous areas under nonexclu- sive franchise agreements which are in effect until 1991. The Division has no separate legal status or existence. Its resources and existence are at the disposal of American Television and Communications Corpo- ration (ATC) management, subject to contractual commitments by ATC to perform certain long-term contracts within the present divisional structure. Its assets are legally available for the satisfaction of debts of the entire corporation, not solely those appearing in the accompanying statements, and its debts may result in claims against assets not appearing therein. It is one of several divisions and subsidiaries of ATC, and transactions and the terms thereof may be arranged by and among members of the affiliated group. ATC is an 82% owned subsidiary of Time Incorported (Time). The Division records charges for selling, general and administrative expenses that are directly associated with it and a portion of the ATC expenses ( $384,752 for the year ended June 30,1987) which are allocated to divisions and sub- sidiaries based upon subscriber levels. Interest charged to the Division byATC ($383,105) was computed by multiply- ing 70% of the Division's average net assets (computed using beginning and end of year balances) by the average interest rate (8.21% for the year ended $5,531,088 June 30, 1987) on ATC's outstanding borrowings. 5,233,822 297,266 138,000 159,266 6,797,485 (421,875) $6,534,876 See notes of fmancial statements. 2. SIGNIE'ICANT ACCOUNTING POLICIES. Property, plant and equipment: Depreciation is provided on the straight-line basis over the estimated useful lives of the assets as follows: Building & improvements -10-20 years Distribution system -8-15 years Vehicles & other equipment -4-10 years Franchise costs: The Division has deferred costs incurred to acquire the franchises. Amortization of franchise costs is provided on the straight-line basis over periods of up to forty years. 9 3. RESTRICTED CASH. Cash is restricted in the amount of converter deposits ($172,087 at June 30, 1987). This amount is heldby the Division and is refundable to customers. 4. RELATED PARTY TRANSAC- TIONS. The statement of revenues and expenses and changes in net assets includes charges for programming and promotional services providedby Home Box Office Incorporated, a subsidiary of Time. These charges were based upon customary.rates. 5. INCOME TAXES Operating results of the Division are included in the consolidated federal income tax return of Time. In lieu of income taxes, ATC charges the Division an amount which approxi- mates statutory state and federal income tax rates on pretax income, less investment tax credits (ITC) on current year property additions. For the year ended June 30, 1987, ITCs utilized was approximately $28,000 and a provision of approximately $13,000 has been charged for a reduption in basis of certain property, plant and equipment due to investment tax credit utilized. ITC is accounted for by the flow-through method. 6. LEASES. Rental expense for the year ended June 30, 1987 amounted to $ 72,533. The Division had no significant noncancelable rental commitments. 1986-1987 ine H lx-ensio-ns DATE FRANCHISE LOCATION FOOTAGE PASSINGS 06-25-86 City of 12-10-86 Ithaca 12-29-86 09-01-86 12-12-86 12-09-86 1 225 EDDY STREET 1 HANCOCKSTREET 1 EAST STATE STREET 1 SCHUYLER HOUSE 1 WYCKOFF AVENUE 1 FAYETTE & WEST CLINTON 81 193 175 149 439 65 8 UG 1 AE 13 UG 80 UG 15 AE 53 UG TOTALS 1102 170 12-09-86 Town of 06-02-86 Ithaca 05-22-87 01-30-87 07-14-87 09-16-86 06-27-87 06-11-87 06-03-87 07-21-87 12-08-86 06-01-86 2 EAST KING ROAD 2 PENNY LANE 2 EASTHILLPLAZA 2 ROUTE79 2 WEST HAVEN ROAD 2 FAIRWAY DRIVE 2 WOODGATELANE 2 SEVEN MILE DRIVE 2 SDNNYVIEWLANE 2 DANBYROAD 2 LEXINGTON DRIVE 2 GRANDVIEW 236 939 455 350 360 1.405 458 1532 732 1029 540 2020 1 14 80 20 3 17 2 17 16 12 10 26 AE UG UG UG .AE UG AE UG UG UG UG UG TOTALS 10056 218 08-01-86 Cayuga Heights 3 LOWELLPLACE 814 8 UG 07-08-87 Trumansburg 4 KING STREET 889 3 .AE 06-16-88 Braoktondale 07-27-87 02-01-87 6 BROOKTONDALE ROAD 6 SLATERVILLE ROAD 6 BROOKTONDALE ROAD 375 257 295 1 AE 1 AE 4 AE TOTALS 927 6 07-01-86 Village of 08-01-86 Lansing 7 EDELMAN SUB -DIVISION 7 SHANNON PARK 570 2990 20 UG 35 UG TOTALS 3560 55 06-10-87 Town of 06-01-87 Dryden 08-01-86 8 HICKORY ROAD 8 TANNERY CIRCLE 8 LOGANS RUN 310 2215 1436 1 UG 24 UG 13 UG TOTALS 3961 38 07-01-86 Newfield 08-01-86 07-16-87 9 SHAFFER ROAD 9 WARDS TRAILER PARK 9 364 MAIN STREET 330 290 656 2 AE 6 UG 3 AE TOTALS 1276 11 08-01-86 Town of 03-09-87 Lansing 09-20-86 10-09-86 10 FOREST ACRES DRIVE 10 MYERS MARINA 10 LANSING STATION ROAD 10 16 LEROYAVENUE 1400 615 382 500 11 UG 36 UG 1 UG 1 AE TOTALS 2897 49 09-02-86 Ulysses 11 ITHACAYACHT CLUB 250 1 AE 06-27-87 Danby 07-31-87 12 ROUTE96-1/2 12 GUNDERMAN ROAD 545 1175 3 UG 3 AE TOTALS 1720 6 11-24-86 Village of 13 ROCK STREET Newark Valley 220 1 AE 07-01-86 Village of 16 FERGUSON 07-01-86 Dryden 16 HILTON ROAD 875 1260 8 UG 15 UG TOTALS 2135 23 12-31-86 Town of Dryden 18 DODGE ROAD 2081 2 AE 07-03-86 Town of 20 BRIDGE STREET 386 2 AE Newark Valley GRAND TOTALS 32274 593 6.1126 MILES UG = Underground AE = Aerial 10 Re DL c _ 1986-1987 DATE FRANCHISE LOCATION FOOTAGE 11-25-86 City of 1 STEWART AVENUE 02-05-87 Ithaca 1 DRYDENROAD 12-23-86 1 MEADOW STREET 01-21-87 1 EAST STATE STREET 11-06-86 1 HANCOCK STREET 08-12-86 1 BARTON 421 AERIAL 2423 AERIAL 1133 AERIAL 2052 AERIAL 105 AERIAL 142 AERIAL TOTALS 6276 08-06-86 Town of 2 STONE QUARRYROAD 02-05-87 Ithaca 2 SNYDER HILL ROAD 08-04-86 2 CODDINGTONROAD 10-16-86 2 CODDINGTONROAD 12-10-86 2 EAST KING ROAD 12-11-86 2 RIDGECREST 3150 AERIAL 1553 AERIAL 550 AERIAL 1246 UG 2155 AERIAL 300 AERIAL TOTALS 8954 08-12-86 Cayuga 06-01-86 Heights 06-18-86 06-23-86 3 RIDGEWOOD 3 400 TRIPHAMMER ROAD 3 COMSTOCK/KLIREW00DS 3 ROUTE 13 301 AERIAL 300 UG 1799 AERIAL 1817 AERIAL TOTALS 4217 03-12-87 Trumansburg 4 PENNSYLVANIAAVENUE 2170 AERIAL 06-23-86 4 SOUTH STREET 450 AERIAL TOTALS 2620 01-22-87 Village of Candor 5 MILL STREET 936 AERIAL 06-27-87 Brooktondale 6 BROOKTONDALE ROAD 10-28-86 6 ROUTE 79 02-12-87 6 ROUTE 79 3959 AERIAL 1293 AERIAL 2144 AERIAL TOTALS 7396 06-25-87 Village of 7 GRAHAM ROAD 09-10-86 Lansing 7 WARDS 2731 AERIAL 230 AERIAL TOTALS 2961 11-07-86 Town of 05-28-87 Dryden 06-01-87 8 SUNSET WEST CIRCLE 8 HANSHAWROAD 8 HANSHAW ROAD 950 AERIAL 188 UG 190 UG TOTALS 1328 01-02-87 Newfield 9 TRUMBULLS CORNERS 02-13-87 9 WARDS TRAILER PARK 521 AERIAL 50 AERIAL TOTALS 571 12-05-86 Town of 10 ROUTE 34 01-02-87 Lansing 10 LANSING STATION ROAD 250 AERIAL 1819 AERIAL TOTALS 2089 11-04-86 Ulysses 11 ROUTE 89 07-29-86 11 MAPLEWOOD 222 AERIAL 1542 AERIAL TOTALS 1764 03-24-87 Danby 12 EAST MILLER ROAD 2400 AERIAL 02-05-87 Town of Groton 15 ROUTE 38 2819 AERIAL ' 02-12-87 Village of 16 MILL STREET 225 AERIAL Dryden 11-26-86 Town of 18 TWEITMANN 02-25-87 Dryden 18 LOWER CREEK ROAD 06-19-86 18 ROUTE 79 1012 AERIAL 350 AERIAL 256 AERIAL TOTALS 1618 08-06-86 Town of 20 ROUTE 38 Newark Valley 4453 AERIAL GRAND 60607 TOTALS 9.89 MILES UG = Underground 11 NEW YORK STATE COMMISSION .. ON CABLE TELEVISION FORM AFR-1 Annual Financial Report for Period Beginning July 1, 1987, and Ending June 30, 1988. Name American Community Cablevision, Division of American Television and Communications Corporation Full Name of Cable Television Company Address 116 Inverness Drive East Mailing Address Englewood Colorado : 80112 City State Zip Code Telephone No. (Include Area Code) (303) 799-9599. Business Entity Division of American Television. and Communications Corporation (Indicate if a: Sole proprietorship; Partnership; Limited partnership; Corporation; Subchapter S. Corporation; Not for profit Corporation; Other (describe). Reporting Entity Individual entity report (Indicate if this is a consolidated or individual entity report) Notice This report shall be filed with the Commission by every cable television company required to maintain records and adopt the accounts prescribed in the Uniform Accounting System, and may be filed by any cable television which voluntarily uses the accounts specified in the Uniform Accounting System. This report shall be filed with the Commission within 90 days of the end of your fiscal year. Part I of this report consists of questions of a general informational nature; Part II consists of financial statements and schedules based on the accounts specified in the UAS: Part III consists of consolidated financial statements and shall be completed by any company having an ownership interest of 20% or more in another company and shall include any company not included in Part II or for which a separate report is not attached and any operations of a non - cable nature or which arose from out of state operations. General Instructions 1. All entries are to be in permanent form. Decreases are to be shown enclosed in parentheses. 2. The words "not applicable" are to be shown on any schedules or in reply to any question which does not apply to respondent. 3. Additional explanations, schedules or statements may be attached to the back of this form by respondent for the purpose of further explanation if insufficient space has been provided on this form. The additional explanations, schedules or statements shall be cross-referenced to the question, statement or schedules to which they are related. 4. Amounts reported on this report shall be rounded to the nearest dollar. 5. If you require assistance phone (518) 474-2471 or write New York State Commission on Cable Television, Tower Building, Empire State Plaza, Albany, New York 12223. 3. At any time in the reporting period did you own or control 20% or more of any other company, or did another company own or control 20% or more of your company? X Yes No If yes, list the companies below. } Percentage of Ownership Consolidated Or Control Held By You on Part II A. Name of Company In Another Company Yes/No B. 1. Not applicable. 2. 3. 4. 5. 6. 7. 8. 9. 10. Percentage of Ownership Consolidated Or Control Held By on Part II Name of Company Another Company In You Yes/No 1. American Television and Communications Corporation American Community Cablevision is 2. an operating Division of ATC 100% No 3. 4. 5. 6. 7. 8. 9. 10. CERTIFICATION I certify that I have examined this report and that all statements of fact contained therein are true, complete, and correct to the best of my knowledge, information, and belief and that nothing material has occurred that would require explanation that has not been explained. Controller American Television and a.)1 . I/o Communications Corporation, National Division Signalture Title Ivy W. Parish September 29, 1988 Printed Name of Signer Date Signed PART I 1. To Whom Should Correspondence and Inquiries Concerning This Report Be Addressed? Ivy W. Parish 116 Inverness Drive East Name Mailing Address Controller American Television and Communications Englewood, Colorado Title Corporation - National Division City State (303) 799-9599 80112 Phone Number (Include Area Code) Zip Code 2. List below the name of each locality granting a franchise and also each geographic area you serve in which a franchise has not been granted. Identify whether a local- ity is a city, town, or village by using the following codes: 'C' -City, 'T' -Town and 'V' -Village. Indicate operation in a non -franchised area by placing the letter "N" after the area served. The Number of Subscribers shown is defined as the total amount of first, or primary outlets installed in each area served without reference to the number of additional outlets or services subscribed to be each customer. A decimal point has been provided in columns D, E, and F for fractional numbers. For whole numbers place a zero to the right of the decimal point. Should you serve more localities than space provided, please make additional copies of page 2b. * * * * * * * * * * * * * * * Reserved for office use only * * A. * B. C. D. E. F. * * Total Municipality Code * Estimated Route * Percentage Miles of Miles it * Name of Franchise Number of of Plant FranchisE Company ID * or Area Served Subs. Penetration Completed Area * 1) * City of Ithaca 7,243 75.0 59.34 59.34 * 2) * Town of Ithaca 3,277 62.0 66.48 66.48 * 3) * Vill.of Cayuga Hts. 1,076 94.0 19.0 19.0 * 4) * Vill.of Trumansburg 661 92.0 10.32 10.32 * 5) * Vi11.of,Candor 341 87.0 4.37 4.37 * 6) * Town of Caroline 488 77.0 18.36 18.36 * PART I (Continued) ************** Reserved for * office use * only * * A. * B. C. D. E. F. * * Total Municipality Code * Estimated Route * Percentage Miles of Miles it * Name of Franchise Number of of Plant Franchise Company ID_ * or Area Served Subs. Penetration Completed Area * 7) * Vill. of Lansing 1,379 94.0 16.72 16.72 * 8) * Town of Dryden 2,313 82.0 70.19 70.19 * 9) * Town of Newfield 1,008 91.0 27.1 27.1 * 10) * Town of Lansing 1,381 86.0 52.9 52.9 * 11) * Town of Ulysses 325 44.0 20.11 20.11 * 12) * Town of Danby 376 81.0 19.02 19.02 * Village of 13) * Newark Valley 403 84.0 5.93 5.93 * 14) * Vill. of Groton 838 94.0 11.09 11.09 * 15) * Town of Groton 182 80.0 9.27 9.27 * 16) * Vill. of Dryden 619 85.0 10.62 10.62 * 17) * Vill. of Freeville 155 86.0 3.13 3.13 * 18) * Town of Candor 382 75.0 16.05 16.05 * Town of Newark 19) * Valley 280 73.0 12.45 12.45 * 20) * * 21) * * 22) * _ * 23) * * 24) * * 25) * - * TOTAL 22,727 452.45 452.45 PART II Statement of Profit and Loss Line No. Account No. Name Amounts FILE CODE 20 1. Operating Income 2. 4110.0 Installation Income $ 205,238 3. 4120.0 Regular Subscriber Charges $3,419,162 4. 4130.0 Per Program or Per Channel Charges $1,436,603 5. 4140.0 Other Subscriber Revenues $ 631,473 6. Total Subscriber Revenues 7. 4210.0 Advertising Income $ 192,329 8. 4220.0 Special Service Income $ 2,244 9. 4230.0 Other Non -Subscriber Revenues $ 0 10. Total Non -Subscriber Revenues 11. Total Operating Income 12. Cost of Operations 13. 5100.0 Service Costs 14. 5200.0 Origination Costs 15. 5300.0 Selling, General and Administrative Expense 16. 5400.0 Depreciation and Amortization 17. Total Operating Costs 18. Total Operating Profit or (Loss) (Line 11 - Line 17) $5,692,476 $ 194,573 $1,049,582 $1,318,318 $2,020,173 $ 946,340 $5,887,049 $5,334,413 $ 552,636 PART II Statement of Profit and Loss (Continued) 19. Other Income and Expenses 20. Other Income 21. 6110.0 Interest $ 0 22. 6120.0 Dividends $ 0 23. 6130.0 Other $ 0 24. Total Other Income $ 0 25. Other Expenses 26. 6210.0 Interest $ 471,402 27. 6220.0 Miscellaneous $ 0 28. Total Other Expense $ 471,402 29. Total Other Income or (Expenses) (Line 24 - Line 28) FILE CODE 20 $ (471,402) 30. Profit or (Loss) Before Taxes (Line 18 + or - Line 29) $ 81,234 31. Provision for Federal and State Income Taxes 32. 7100.0 Federal Income Taxes 33. 7200.0 State Income Taxes 34. Total Income Taxes Payable 35. Total Profit or (Loss) Before Extraordinarx Items (Line 30 - Line 34) 36. 8000.0 Extraordinary Items* 37. Total Profit or (Loss) * Please provide schedule of items and amounts. $ 13,000 $ 8,000 $ 21,000 $ 60,234 $ 0 $ 60,234 BALANCE SHEET ASSETS Line No. Account No. Name Amounts FILE CODE 30 1. Current Assets 2. 1110.0 Cash $ 201,557 3. 1120.0 Short-term Investments $ 0 4. 1130.0 Accounts Receivable - Trade $ 151,176 5. 1139.0 Less: Allowance for Doubtful Accounts $ (128,072) 6. Accounts Receivable - Net $ 23,104 7. 1140.0 Other Receivables $ 49,532 8. 1149.0 Less: Allowance for Doubtful Accounts $ (7,000) 9. Other Receivables - Net $ 42,532 10. 1150.0 Inventory $ 47,464 11. 1160.0 Broadcasting Rights $ 0 12. 1170.0 Prepaid Expenses $ 2,124 13. 1180.0 Other Current Assets $ 0 14. Total Current Assets 15. Plant Assets 16. 1200.0 Fixed Assets $11,639,030 17. 1300.0 Construction Work in Progress $ 1,444,267 18. 1500.0 Plant Adjustments $ 0 19. 1400.0 Less: Allowance for Accumulated Depreciation and Amortization $(5,695,771) 20. Total Plant Assets $7,387,526 $ 316,781 BALANCE SHEET ASSETS (Continued) 21. Other Assets 22. 1610.0 Intangible Assets $ 1,417,405 23. 1620.0 Deferred Charges $ 0 24. 1630.0 Long Term Investments $ 0 25. 1640.0 Organization Costs $ 0 26. 1650.0 Other Assets $ 3,500 27. Total Other Assets 28. Total Non -Current Assets (Line 20 + Line 27) 29. Total Assets (Line 14 + Line 28) LIABILITIES AND OWNERS' EQUITY 30. Current Liabilities 31. 2110.0 Loans Payable $ 7,681,933 32. 2120.0 Subscriber Advance Payments and Deposits $ 313,576 33. 2130.0 Accounts Payable $ 983,209 34. 2140.0 Taxes & Other Withholdings $ 6,341 35. 2150.0 Accrued Expenses $ 222,863 36. 2160.0 Accrued Taxes $ 0 37. 2170.0 Other Current Liabilities $ 0 38. 2180.0 Dividends Payable $ 0 39. Total Current Liabilities $ 1,420,905 $ 9,207,922 FILE CODE 30 $ 8,808,431 $ 9,125,212 FILE CODE 30 BALANCE SHEET LIABILITIES AND OWNERS' EQUITY (Continued) 40. Non -Current Liabilities 41. 2300.0 Long -Term Debt $ N/A 42. 2400.0 Operating Allowances $ N/A 43. 2500.0 Other Non -Current Liabilities $ N/A 44. Total Non -Current Liabilities $ N/A 45. Owners' Equity 46. 3100.0 Common Stock - Issued $ N/A 47. . 3200.0 Preferred Stock - Issued $ N/A 48. 3300.0 Treasury Stock $ N/A 49. 3400.0 Proprietors' Equity $ N/A 50. 3500.0 Additional Paid -In Capital $ N/A 51. 3600.0 Retained Earnings or Accumulated Deficit $ (82,710) 52. Total Owners' Equity $ (82,710) 53. Total Liabilities and Owners' Equity $ 9,125,212 INSTRUCTIONS . If Line 43, Other Non -Current Liabilities, is significant in amount list the major items comprising it, and the amounts therein. ▪ Furnish particulars as to any significant contingent assets or liabilities existing at year end or any significant change in the financial condition of the company occurring after the end of the fiscal year but prior to filing this report. List on reverse side. • List the total amount of subscriber Advance Payments, Account #2121.0 and the total amount o1 Subscriber Deposits, Account #2122.0 held by you and indicate if you pay interest on these amounts and if so, how much. Subscriber Advance Payments $161,401 Subscriber Deposits 152,175 Total $313,576 Interest is not paid on these amounts. PLANT, INTANGIBLES & DEFERMENTS EXPLANATION OF ENTRIES LINE NO. INSTRUCTIONS 1. The balance at the beginning of the year, column A should agree with the closing balances on last year's Schedule of Plant, Intangibles & Deferments; the balance at the end of the year should agree with closing balances on this year's balance sheet. 2. Amounts reported in column D, transfers and adjustments, should be explained in the space provided above. 3. The amounts shown in'column E, lines 15, 16, 20 and line 21 column F must agree with amounts shown on the balance sheet, lines 16, 17, 18 and 19, respectively. 4. Unamortized Debt Expense is amortized by charging "Interest Expense", this will be reflected on this schedule by entering this amount in column D. 5. Intangible assets and deferred charges should be recorded at cost with the accumulated amortization reported in column F. The amounts reported in line 26 column E minus line 26 column F must agree with the amount reported on the balance sheet in line. 22. The amounts reported in line 31 column E minus line 31 column F must agree with the amount reported on the balance sheet in line 23. STATEMENT OF CHANGES IN FINANCIAL POSITION FILE CODE 40 Financial Resources Were Provided By: From Operations: 1. Net Income (Loss) before Extraordinary Items $ 60,234 2. Extraordinary Income (Loss) 0 3. Total Net Profit (Loss) 60,234 4. Depreciation &Amortization 946,340 5. Funds Provided by Operations (lines 3 and 4) 1,006,574 6. Long-term debt 0 7. Equity Investments 0 8. Other 0 9. Funds,Not Provided by Operations (lines 6, 7, and 8) 0 10. Total Resources Provided (lines 5 and 9) 1,006,574 Financial Resources Were Used For: 11. Additions to fixed assets $ 2,478,026 12. Reduction of long-term debt 0 13. Dividends paid or equity withdrawals 0 14.. Investments 0 15. Other 144,679 16. Total Resources Used (total lines 11 to 15) 2,622,705 Change in Working Capital: 17. Prior Years Current Assets $ 411,072 18. Prior Years Current Liabilities 7,686,082 19. Difference (line 17 less line 18) (7,275,010) 20. Current Years Current Assets 316,781 21. Current Years Current Liabilities 9,207,922 22. Difference (line 20 less line 21) (8,891,141) 23. Net Change in Working Capital (line 19 plus or minus line 22) NOTE: Line 10 minus line 16 must agree with line 23. $ (1,616,131) ACCOUNT LINE NUMBER DESCRIPTION Fixed Assets 1. 1210.0 Land PLANT, INTANGIBLES AND DEFERMENTS FILE CODE 50 • (A) (B) (C) (D) (E) (F) ACCUMULATED BALANCE AT TRANSFERS DEPRECIATION BEGINNING ADDITIONS AND BALANCE AT AND OF YEAR DURING YEAR RETIREMENT ADJUSTMENTS END OF YEAR AMORTIZATION, 2. 1220.0 Buildings 3. 1230.0 Head -End $ 29,850 $ 0 $ 0 $ 0 $ 29,850 $ 452,652 48,613 0 0 501,265 (168,686) 663,681 17,395 0 0 681,076 (328,985) 4. 1241.0 Subscriber Devices 3,523,658 281,816 (43,753) 0 3,761,721 (1,788,028) 5. 1242.0 Other 4,533,121 344,314 0 0 4,877,435 (2,754,377) 6. Total Trunk and Distribution 8,056,779 626,130 (43,753) 0 8,639,156 (4,542,405) (Line 4 and Line 5) 7. 1250.0 Test Equipment and Tools 8. 1260.0 Program Origination 212,242 43,057 0 0 255,299 (122,192) 569,758 59,391 0 0 629,149 (157,826) 9. 1270.0 Vehicles 10. 1276.0 Furniture and Fixtures 316,884 68,726 0 0 385,610 (260,174) 180,276 213,568 0 0 393,844 (115,503) 11. Total Vehicles, Furniture and 497,160 282,294 0 0 779,454 (375,677) Fixtures (line 9 and Line 10) 12. 1280.0 Capitalized Lease Property 0 0 0 0 0 0 13. 1290.0 Leasehold Improvements 0 123,781 0 0 0 0 14. 1299.0 Miscellaneous Equipment 0 0 0 0 0 0 15. Total Fixed Assets 10,482,122 1,200,661 (43,753) 0 11,639,030 (5,695,771) (Total Lines 1 to 3, 6 to 8, 11 to 14) 16. 1300.0 Construction Work in Progress . 123,149 2,521,779 0 (1,200,661) 1,444,267 0 ACCOUNT LINE NUMBER DESCRIPTION 17. Plant Adjustments 18. 1510.0 Plant Adjustment Excess Fair Value FILE CODE 50 PLANT; INTANGIBLES AND DEFERMENTS (Continued) (A) (B) (C) (D) (E) (F) ACCUMULATED BALANCE AT TRANSFERS DEPRECIATION BEGINNING ADDITIONS AND BALANCE AT AND OF YEAR DURING YEAR RETIREMENT ADJUSTMENTS END OF YEAR AMORTIZATION $ 0 $ 0 $ 0 $ 0 $ 19. 1520.0 Plant Adjustment Goodwill 0 0 0 $ 0 0 0 0 0 20. Total Plant Adjustments (Lines 18 + 19) 21. Total Plant Assets 10,605,271 3,722,440 (43,753) (1,200,661) 13,083,297 (5,695,771) (Lines 15 + 16 + 20) 0 0 0 0 0 0 22. Intangible Assets 23. 1611.0 Franchises, Licenses and Permits 2,259,661 116,378 0 0 2,376,039 (958,634) 24. 1612.0 Other Intangible Assets 0 0 0 0 0 0 25. 1613.0 Goodwill 0 0 0 0 0 0 26. Total Intangible Assets 2,259,661 116,378 0 0 2,376,039 (958,634) (Lines 23 + 24 + 25) 27. Deferred Charges 28. 1621.0 Start -Up Costs 0 0 0 0 0 0 29. 1622.0 Unamortized Debt 0 0 0 0 0 0 30. 1623.0 Other Deferred Charges 0 0 0 0 0 0 31. Total Deferred Charges 0 0 0 0 0 0 (Lines 28 + 29 + 30) Line Description NOT APPLICABLE LONG-TERM DEBT Principal Payments Due In FILE CODE 60 (A) (B) (C) (D) (E) (F) Over 5 Year 2 Year 3 Year 4 Year 5 Years Total 1. Motes 2. Owed to Affiliates $ $ $ $ $ $ 3.. Owed to Directors or Officers 4. All Others 5. Total Notes 6. Bonds 7. Owed to Affiliates 8. Owed to Directors or Officers 9. All Others 10. Total Bonds 11. Obligation on Capitalized Leases 12. Unamortized Premium & Discount on Outstanding Debt 13. Total Long -Term Debt (Total of Lines 5, 10, 11 + 12) 14. Interest to be Paid 15. TOTAL (Line 13 + Line 14) $ $ $ $ $ $ INSTRUCTIONS 1. Determine the amount of principal and interest to be paid on all long-term debt. (If interest rate varies use rate in effect at end of current year). 2. On line 12 determine the amount to be amortized yearly and enter in the appropriate column. 3. Cross -foot all totals. The total amount of long-term debt entered on line 13, column "F" shall agree with the total amount of long-term debt entered on line 41 of the balance sheet. DETAILS OF SUMMARIZED EXPENDITURE ACCOUNTS FILE CODE 70 (A) (B) (C) (0) ' SELLING, GENERAL PAYROLL & LINE ITEM ACCOUNT ORIGINATION & ADMINISTRATIVE EXPENSES NO. NO. DESCRIPTION SERVICE COSTS COSTS EXPENSES CAPITALIZED 1. 01.1 Sal. & Wages, Officers & Directors $ N/A $ N/A $ N/A $. N/A 2. 01.2 Salaries and Wages, All Others 541,906 251,547 385,280 N/A 3. 02.1 Emp. Benefits, Officers & Dir.1N/A N/A N/A N/A 4. 02.2 Employee Benefits, All Others 133,710 50,999 113,554 N/A 5. 03.0 Maintenance 172,088 54,776 1,953 N/A 6. 04.0 Pole and Site Rentals 86,263 N/A N/A N/A 7. 05.0 Microwave Service 13,132 N/A N/A N/A 8. 06.0 Light, Heat & Power 62,100 N/A 30,414 N/A 9. 07.0 Vehicle Expenses 49,869 N/A 4,540 N/A 10. 08.0 Rent N/A N/A 11,344 N/A 11. 09.0 Travel & Entertainment N/A N/A 36,587 N/A 12. 10.0 Dues and Subscription N/A N/A 13,150 N/A 13. 11.0 Contributions N/A N/A N/A N/A 14. 12.0 Professional Service N/A N/A 25,165 N/A 15. 13.0 Stationery & Supplies N/A N/A 20,473 N/A 16. 14.0 Postage and Freight 79 N/A 15,251 N/A 17. 15.0 Advertising & Promotion N/A N/A 64,807 N/A 18. 16.0 Telephone & Telegraph 2,801 N/A 39,658 N/A 1 19. 17.0 Sundry Office Expenses N/A N/A N/A N/A Sub -Total $1,061,948 $ 357,322 $ 762,176 N/A DETAILS OF SUMMARIZED EXPENDITURE ACCOUNTS FILE CODE 70 (A) (B) (C) (D) LINE ITEM ACCOUNT NO. NO. DESCRIPTION Balance Forward SERVICE COSTS $1,061,948 SELLING, GENERAL PAYROLL & ORIGINATION & ADMINISTRATIVE EXPENSES COSTS EXPENSES CAPITALIZED $ 357,322 $ 762,176 $ N/A 20. 18.0 Insurance N/A N/A 21,194 N/A 21. 19.0 Provision for Doubtful Accounts N/A N/A 33,146 N/A 22. 20.0 Local Taxes N/A N/A 79,835 N/A 23. 21.0 Franchise, License & Permit Fees N/A N/A 126,078 N/A 24. 22.0 Technical & Creative Service N/A N/A N/A N/A 25. 23.0 Film Expense N/A N/A N/A N/A 26. 24.0 Studio Sets & Props N/A 1,451 N/A N/A 27. 25.0 Program Material & Supplies N/A 24,432 N/A N/A 28. 26.0 News Services N/A 6,534 N/A N/A 29. 27.0 Participation Expense N/A N/A N/A N/A 30. 28.0 Fees & Royalties N/A 916,047 N/A N/A 31. 29.0 Tariff & Leaseback Charges N/A N/A N/A N/A 32. 30.0 Overhead Allocations N/A N/A 451,841 N/A 33. 80.0 Other 111,780 12,532 545,903 N/A 34. Sub -Total 1,173,728 1,318,318 2,020,173 N/A 35. 90.0 Capitalized Cost Offsets (124,146) ( -) ( -) N/A) TOTAL $1,049,582 $1,318,318 $2,020,173 -N/A INSTRUCTIIN 1. The total of Columns A, B, & C should agree with totals reported on Statement of Profit and Loss, lines 13, 14 and 15. 2. Amounts appearing in Column D shall not be included in Columns A, B and C. 3. Please provide details on reverse side of Overhead Allocations, if any, as provided for in Section 599.40(J)- (5). OPERATING ALLOWANCES NOT APPLICABLE FILE CODE 80. (A) (8) (C) (D) Balance Additions Deductions Balance Account Beginning During During at End Line Operating Allowances Number of Year Year Year • of Year 1. Property Insurance Allowance 2410.0 $ $ $ $ 2. ` Injury and Damage Allowance 2420.0 3. .Pension and Benefit Allowance 2430.0 4. Miscellaneous Operating Allowance 2440.0 5. 6. 7. 8. 9. Total Miscellaneous Operating Allowance (Lines 5 to 8) 10. Total Operating Allowance (lines 1 + 2 + 3 + 9) 2400.0 $ $ $ $ INSTRUCTIONS 1. Enter above all information requested for Operating Allowances as entered on the accounts provided for in the UAS. 2. The total shown on Line 10, column D, shall equal the amount entered on line 42 of the Balance Sheet. 3. If you have established one or more miscellaneous operating allowances list their titles on lines 5 through 8 above, and briefly describe below their nature and purpose. PART III Consolidated Financial Statements Instructions 1. Complete this section only if you have an equity interest of 20% or more in another company. Before preparing this section please read Section 599.83 of the UAS. 2. The account balances and transaction totals included in Section II of this report shall be adjusted for inclusion in this Section only to the extent necessary to prepare consolidated financial statements and/or to reflect investments using the equity method. 3. Equity investments in another company shall be accounted for using (i) the cost method for investments of less than 20% and (ii) the equity method for investments of between 20% to 50% and (iii) the preparation of consolidated financial statements for investments of more than 50%. 4. This section will also be completed if a company operates in whole or in part in a state other than New York or has significant non -cable television activities. In such cases New York State cable activities will be reported on Part II of this report and all other activities including New York State cable activities will be reported on Part III. Please refer to Sections 599.83(e) (1) & (2) of UAS for a definition of significant activity. Consolidated Profit or Loss - Not Applicable 1. Operating Revenues Total Cable Television Revenue $ 2. Other Operating Revenues (Itemize on Line 16) $ 3. Total Operating Revenues 4. Operating Expenses 5. Total Cable Television Expense $ 6. Other Operating Expenses (Itemize on Line 16) $ 7. Total Operating Expenses 8. Total Operating Profit or Loss 9. Other Income - equity income in subsidiary $ 10. Other Expenses $ 11. Total Other Income or Expenses 12. Total Profit or Loss Before Income Taxes 13. Total Income Taxes 14. Extraordinary Income (Losses) $ 15. Total Profit (Loss) $ Instructions 16. Itemize by major groups or categories, the amounts shown on line 2 and/or line 6 in the space below. CONSOLIDATED BALANCE SHEET - NOT APPLICABLE ASSETS 1. Current Assets 2. Plant Assets 3. Other Assets 4. Investments 5. Total Assets $ $ LIABILITIES AND EQUITY 6. Current Liabilities $ 7. Long-term Debt $ 8. Other Liabilities $ 9. Minority Interest in Subsidiaries $ 10. Total Liabilities $ 11. Equity $ 12. Total Liabilities and Equity $ INSTRUCTIONS 1. The accounts shown in Section 599.32 of the UAS should be used as a general guide in preparing this statement. 2. The amounts shown shall be net of any allowance. 3. The amount shown on line 5 shall equal the amount shown on line 12. CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION NOT APPLICABLE Financial Resources Were Provided By: From Operations: 1. Net Income (Loss) before Extraordinary Items $ 2. Extraordinary Income (Loss) 3. Total Net Profit (Loss) 4. Depreciation & Amortization 5. Funds Provided by Operations (lines 1 to 4) 6. Long-term Debt 7. Equity Investments 8. Other 9. Funds Not Provided by Operations (lines 6, 7, and 8) 10. Total Resources Provided (lines 5 and 9) Financial Resources Were Used For: 11. Additions to Fixed Assets 12. Reduction of Long-term Debt 13. Dividends paid or equity withdrawals 14. Investments 15. Other 16. Total Resources Used (total Lines 11 to 15) Change in Working Capital: 17. Prior Years Current Assets 18. Prior Years Current Liabilities 19. Difference (line 17 less than 18) 20. Current Years Current Assets 21. Current Years Current Liabilities 22. Difference (line 20 and line 21) 23. Net Change in Working Capital (line 19 plus or minus line 22; line 10 minus line 16 must agree with line 23) * See instructions page 9. $ November 10. 1:;83 City of Ithaca Ithaca, New York Dear Sir: A4e■m mum American Television 8 Communications Corporation A Time Inc. Company National Division 116 Inverness Drive East Englewood. Colorado 80112 (303) 799-9599 Enclosed please find a check for $15,626.06 which is payment of franchise fees for the period from February, 1988 through June. 1988 for American Community Cablevision. This payment reflects the additional 2% franchise fees due. according to the new agreement. Computation is as follows: Month Gross Revenues February, 1988 $157,592.17 March 164,592.61 April 166.177.16 May 159,556.15 June 133,384.86 Total Rate $781.302.95 2.00% Franchise Fee $15,626.06 I. Janice 3. Waggoner, Vice President of Finance of American Television and Communications Corporation. National Division, certify that the above,sr_hedule summarizes the Gross Revenues, as defined in the franchising agreement. for the period indicated for the CATV operati..ns in' the City of Ithaca. Signed: JSW ncg Enclosure Janice. goner.-;J:ice President of Finance Providing entertainment and information choices. July 18, 1988 City of Ithaca Ithaca, New York Dear .Sir: American Television & Communications Corporation -A Time Inc. Company National Division 116 Inverness Drive East Englewood. Colorado 80112 (303) 799-9599 Enclosed please find,a :check for $53,376.93 which is payment of franchise fees for. the period from .July, 1987 .through June, 1988 for American Community Cablevision. Computation is as follows: Month July, 1987 August September October November December January, 1988 February March April May June Total Rate Franchise, Fee Gross Revenues $131,427.16 125,695.87 163,463.91 142,258.40. 151,542.70 131,138.95 152,400.94 157,592.17 164,592.61 166,177.16 159,556.15 133,384.86 $1,779,230.88 3% $53,376.93 I, Ivy W. Parish, Controller of American Television and Communications Corporation, National Division, certify that the above schedule summarizes the Gross Revenues, as defined in the franchising agreement, for the period indicated for the CATV operations in the City of Ithaca. Signed: IWP/ncg Enclosure Ivy W. Parish, Controller °rovromq ,:ntc.^.amment and. intorrnatrcn chmts