<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 31, 1997
JONES INTERCABLE, INC.
----------------------
(Exact name of registrant as specified in its charter)
Colorado 1-9953 84-0613514
-------- ------ ----------
(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- --------------------------------------------------- --------------
(Address of principal executive office and Zip Code (Registrant's
telephone no.
including area code)
<PAGE>
Item 7. Financial Statements
--------------------
The following described financial statements are being filed as an
amendment to the Form 8-K dated February 7, 1997 of Jones Intercable, Inc. in
connection with the acquisition by Jones Communications of Maryland, Inc., a
wholly owned subsidiary of Jones Intercable, Inc., of the cable television
system operating in and around North Prince George's County, Maryland (the
"North Prince George's County System").
a. Financial statements of businesses acquired. Historical financial
-------------------------------------------
statements of Maryland Cable Partners, L.P.
b. Pro forma financial information. Consolidated pro forma financial
-------------------------------
statements of Jones Intercable, Inc. reflecting the acquisition of the North
Prince Georges's County System.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Maryland Cable Partners, L.P.:
We have audited the accompanying balance sheets of Maryland Cable Partners, L.P.
(the "Partnership") as of December 31, 1996 and 1995, and the related statements
of operations, partners' capital, and cash flows for years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maryland Cable Partners, L.P.
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Washington, D.C.
April 4, 1997
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Balance Sheets
December 31, 1996 and 1995
(In thousands)
- --------------------------------------------------------------------------------
ASSETS (note 4) 1996 1995
- --------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 4,526 4,550
Accounts receivable, net of allowance of $337 in
1996 and $240 in 1995 1,504 1,690
Prepaid expenses and other assets 650 321
- --------------------------------------------------------------------------------
Total current assets 6,680 6,561
Property and equipment, net (note 2) 43,627 42,582
Other assets, net (note 3) 93,750 106,367
- --------------------------------------------------------------------------------
$ 144,057 155,510
================================================================================
LIABILITIES AND PARTNERS' CAPITAL
- --------------------------------------------------------------------------------
Current liabilites:
Current maturities of long-term debt (note 4) $ 83,288 3,150
Accounts payable and accrued liablities (note 6) 4,059 4,637
Accrued interest 201 325
- --------------------------------------------------------------------------------
Total current liabilities 87,548 8,112
Long-term debt (note 4) 26 83,504
Partners' capital (note 5) 56,483 63,894
- --------------------------------------------------------------------------------
Commitments and contingencies (notes 4 and 8) $ 144,057 155,510
================================================================================
See accompanying notes to finanical statements.
4
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Statements of Operations
Years ended December 31, 1996 and 1995
(In thousands)
================================================================================
1996 1995
- --------------------------------------------------------------------------------
Cable television revenues $ 49,696 46,816
Operating expenses:
Programming costs 11,148 10,975
Selling, service, and system management 6,940 6,768
General and administrative 9,675 9,269
Management fees and expenses (note 6) 2,349 2,254
Depreciation and amortization 19,456 18,175
- --------------------------------------------------------------------------------
49,568 47,441
- --------------------------------------------------------------------------------
Operating income (loss) 128 (625)
- --------------------------------------------------------------------------------
Other expenses (income):
Interest expense (note 4) 7,142 8,166
Interest income (196) (173)
Other, net 593 595
- --------------------------------------------------------------------------------
7,539 8,588
- --------------------------------------------------------------------------------
Net loss $ (7,411) (9,213)
================================================================================
See accompanying notes to financial statements.
5
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Statements of Partners' Capital
Years ended December 31, 1996 and 1995
(In thousands)
================================================================================
General Preferred
Partners Limited Limited
(note 5) Partners Partners Total
- --------------------------------------------------------------------------------
Balance, December 31, 1994 $ 705 69,752 650 71,107
Capital contribution - 2,000 - 2,000
Net loss allocation (92) (9,121) - (9,213)
- --------------------------------------------------------------------------------
Balance, December 31, 1995 613 62,631 650 63,894
Net loss allocation (74) (7,337) - (7,411)
- --------------------------------------------------------------------------------
Balance, December 31, 1996 $ 539 55,294 650 56,483
===============================================================================
See accompanying notes to financial statements.
6
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Statements of Cash Flows
Years ended December 31, 1996 and 1995
(In thousands)
================================================================================
1996 1995
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (7,411) (9,213)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Loss on valuation of property held for sale - 108
Loss on disposal of property and equipment 375 266
Depreciation and amortization 19,456 18,175
Changes in assets and liabilities:
Accounts receivable 186 (292)
Due from ML Opportunity, net - 159
Prepaid expenses and other assets (329) 70
Accounts payable and accrued liabilities (578) (1,529)
Accrued interest (124) (24)
- --------------------------------------------------------------------------------
Net cash provided by operating activities 11,575 7,720
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (8,661) (8,896)
Proceeds from sale of equipment 402 147
- --------------------------------------------------------------------------------
Net cash used in investing activities (8,259) (8,749)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of long-term debt (3,340) (518)
Capital contribution - 2,000
- --------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (3,340) 1,482
- --------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (24) 453
Cash and cash equivalents, at beginning of year 4,550 4,097
- --------------------------------------------------------------------------------
Cash and cash equivalents, at end of year $ 4,526 4,550
================================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 7,474 8,260
================================================================================
See accompanying notes to financial statements.
7
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
December 31, 1996 and 1995
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
Maryland Cable Partners, L.P., ("MCP" or the "Partnership") began
operations on September 30, 1994 as a result of the reorganization of
Maryland Cable, Inc. (MCI), under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the Southern
District of New York (the Bankruptcy Court).
The Partnership was formed for the purpose of acquiring, operating and
developing cable television systems. The Partnership currently owns and
operates a cable television system in communities generally located in the
state of Maryland, and in and around the District of Columbia.
CASH EQUIVALENTS
For purposes of the statements of cash flows, the Partnership considers all
highly liquid investments with original maturities of three months or less
to be cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment in existence on the reorganization date are recorded
at appraised values. Property and equipment additions subsequent to the
effective date of the reorganization are recorded at cost, including all
direct costs and certain indirect costs associated with the construction of
cable television transmission and distribution systems, and the cost of new
customer installations. Maintenance and repairs are charged to expense as
incurred and equipment replacements and betterments are capitalized.
Property held under capital lease is stated at the present value of minimum
lease payments.
Property and equipment are depreciated using the straight-line method based
on estimated useful lives as follows: buildings, 15 years; cable systems,
3 to 10 years; and vehicles and other, 3 to 10 years. Property held under
capital lease is amortized using the straight-line method over the shorter
of the lease term or estimated useful life of the asset.
OTHER ASSETS
8
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Franchise rights and goodwill are amortized on a straight-line basis over
ten years. Organization costs are amortized on a straight-line basis over
five years. The Partnership assesses the recoverability of intangible
assets as well as the related amortization lives by determining whether the
carrying value of the intangible assets can be recovered over the remaining
lives through projected undiscounted future cash flows.
9
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(1) CONTINUED
RECOVERABILITY OF LONG-LIVED ASSETS
In 1996, the Partnership adopted the provisions of the Financial Accounting
Standards Board's statement of Financial Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, which requires impairment losses to be recorded
on long-lived assets used in operations when indicators of impairment are
present and either the discounted future cash flows estimated to be
generated by those assets or the fair market value are less then the
assets' carrying amount. SFAS No. 121 also addresses the accounting for
long-lived assets expected to be disposed of. The adoption of SFAS No. 121
did not impact the financial position or results of operations of the
Partnership.
In accordance with the provisions of SFAS No. 121, the Partnership
periodically reviews the carrying amounts of long-lived assets, franchise
rights, going concern value, and other assets to determine whether current
events or circumstances indicate that the carrying amount of an asset may
not be recoverable. The Partnership recognizes an impairment loss when the
sum of expected future cash flows is less then the carrying amount of an
asset. Considerable management judgment is necessary to estimate future
cash flows. Accordingly, actual results could vary significantly from such
estimates.
REVENUES
Revenues from basic and premium service are recognized when the service is
provided. Installation revenues are recognized to the extent of direct
selling costs incurred. The remainder, if any, is deferred and amortized
to income over the estimated average period over which customers are
expected to remain connected to the cable television system. During the
years ended December 31, 1996 and 1995, installation revenues were less
than direct selling costs incurred. Advance payments received from
customers are deferred and included in accounts payable and accrued
liabilities in the accompanying financial statements.
INCOME TAXES
The Partnership has not provided for income taxes since such taxes are the
responsibility of the individual partners.
10
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
DISCLOSURE OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
11
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(2) PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1996 and
1995 (in thousands):
1996 1995
---------------------------------------------------------------------------
Cable systems $ 53,967 46,191
Land and buildings 2,467 2,401
Vehicles and other 1,664 1,268
---------------------------------------------------------------------------
58,098 49,860
Accumulated depreciation (14,471) (7,278)
---------------------------------------------------------------------------
$ 43,627 42,582
---------------------------------------------------------------------------
(3) OTHER ASSETS
Other assets consist of the following at December 31, 1996 and 1995 (in
thousands):
1996 1995
---------------------------------------------------------------------------
Franchise rights $ 106,259 106,259
Goodwill 14,552 14,552
Property held for sale -- 500
Organization costs 178 178
Other 15 15
---------------------------------------------------------------------------
121,004 121,504
Accumulated amortization (27,254) (15,137)
---------------------------------------------------------------------------
$ 93,750 106,367
---------------------------------------------------------------------------
12
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(4) LONG-TERM DEBT
The Partnership has outstanding borrowings on long-term debt arrangements
at December 31, 1996 and 1995 as follows (in thousands):
1996 1995
---------------------------------------------------------------------------
Long-term debt $ 83,282 86,622
Capital lease obligations 32 32
---------------------------------------------------------------------------
83,314 86,654
Less current maturities 83,288 3,150
---------------------------------------------------------------------------
$ 26 83,504
---------------------------------------------------------------------------
The Amended Credit Facility provides for initial borrowings up to
$87,172,000 in the form of two term loans, term loan A of $35,000,000 and
term loan B of $52,172,000. Amounts borrowed under the Amended Credit
Facility bear interest at either (i) the base rate or (ii) the London
Interbank Offered Rate (LIBOR), in each case plus a margin of 2.00 percent
to 3.25 percent. In addition, a marketing fee of .25 percent is added to
the applicable margin. At December 31, 1996 and 1995, the interest rate on
the debt outstanding, which was calculated based on the LIBOR rate, was 7.6
percent and 7.9 percent, respectively, for term loan A and 8.4 percent and
8.6 percent, respectively, for term loan B. Term loan A is paid in
quarterly installments ranging from $550,000 to $2,375,000 commencing in
September 1995.
The Amended Credit Facility is collateralized by all tangible and
intangible assets of the Partnership and a pledge of all partnership
interests in the Partnership. The Amended Credit Facility requires the
Partnership to maintain various financial ratios related to the amount of
outstanding indebtedness and cash flows and restricts the incurrence of
additional indebtedness and payment of management fees. The carrying value
of the long-term debt is considered to approximate fair value as the rates
are variable based upon market rates.
In connection with the acquisition of the Partnership by Jones
Communications of Maryland, Inc. in January 1997 (note 9), both loans, plus
accrued interest, were repaid in February 1997. Accordingly, the balance of
both notes at December 31, 1996 is classified as current in the
accompanying financial statements.
13
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(5) THE PARTNERSHIP
The Partnership was formed on September 30, 1994, as a result of the
reorganization of MCI, as described in further detail in note l(a) to the
financial statements. On September 30, 1994, each partner agreed to
contribute to the Partnership securities and other assets for which the
fair market value would equal the partners' pro rata share of the
Partnership. The general partner holds a 1.0 percent interest in the
Partnership. Initially, ML Opportunity received a 4.9 percent common
limited partnership interest in the Partnership, however, all of ML
Opportunity's common limited partnership interest was purchased by certain
of the holders of previously outstanding senior subordinated discount notes
in accordance with the reorganization of the Partnership. Those discount
noteholders who did not execute the option to purchase common limited
partnership interests still have the opportunity to do so, and their
economic interests are currently reflected as "Unattributed" in the
Partnership Agreement. The remaining interests in the partnership were
allocated 94.1 percent to the discount noteholders pro rata based on the
outstanding principal amounts of their discount notes.
The discount noteholders were also given the opportunity to subscribe to
the offering of preferred limited partnership interests in an amount equal
to such holder's pro rata share of $650,000, the aggregate value of the
preferred limited partnership interests. Preferred limited partnership
interests receive priority returns equal to 11.0 percent per annum,
compounded semiannually, cumulative to the extent not paid on the specified
dates, of the average daily balance of the adjusted capital contribution of
each preferred limited partner. Accumulated priority returns not paid as of
December 31, 1996 and 1995, approximate $177,000 and $93,000, respectively.
The holders of preferred limited partnership interests do not share in the
profit or loss of the Partnership but receive priority returns on their
capital contributions.
During 1995, certain of the limited partners contributed an additional
$2,000,000 to the Partnership. Income and losses have been allocated to the
partners of the Partnership in accordance with the terms of the partnership
agreement.
(6) RELATED PARTY TRANSACTIONS
The Partnership has a management agreement with Marcus Cable Operating
Company, L.P. ("Marcus"), an affiliated entity, whereby Marcus provides
various general, administrative, and operating services to the Partnership.
The management fee paid is
14
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
4.7 percent of revenues. Pursuant to the management agreement, the
Partnership incurred management fees of approximately $2,336,000 and
$2,199,000 in 1996 and 1995, respectively. Management fees payable to
Marcus at December 31, 1996 and 1995 of approximately $13,000 and $8,000,
respectively, have been included in accounts payable and accrued
liabilities within the accompanying financial statements. During 1996 and
1995, in addition to the management fee, Marcus also charged the
Partnership approximately $14,000 and $55,000, respectively, for certain
travel expenses associated with the management of the Partnership.
15
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(7) EMPLOYEE BENEFIT PLAN
The Partnership sponsors a 401(k) plan for its employees whereby employees
that qualify for participation under the plan can contribute up to 15
percent of their salary, on a before tax basis, subject to a maximum
contribution limit as determined by the Internal Revenue Service. The
Partnership matches participants' contributions up to a maximum of 2
percent of a participants' salary. For the years ended December 31, 1996
and 1995, the Partnership made contributions to the plan of approximately
$82,000 and $75,000, respectively.
(8) COMMITMENTS AND CONTINGENCIES
The Company rents pole space from various companies under agreements which
are generally cancelable on short notice and leases office space. Lease and
rental costs charged to expense for the years ended December 31, 1996 and
1995 were approximately $191,000 and $291,000, respectively. The
Partnership also has several noncancellable operating leases for office
space and capital leases for office equipment. Future minimum lease
payments under these operating leases and capital lease payments at
December 31, 1996 are $200,000, $39,000, $12,000, and $5,000 in 1997, 1998,
1999, and 2000, respectively.
In October 1992, Congress enacted the Cable Television Consumer Protection
and Competition Act of 1992 (the "1992 Cable Act"). During May 1993,
pursuant to authority granted to it under the 1992 Cable Act, the Federal
Communications Commission ("FCC") issued its rate regulation rules which
became effective September 1, 1993. These rate regulation rules required
certain cable systems in franchise areas which receive certification and
are not subject to effective competition, as defined, to set rates for
basic and cable programming services, as well as related equipment and
installations, pursuant to general cost-of-service standards or FCC
prescribed benchmarks. These FCC benchmarks were based on an average 10
percent competitive differential between competitive and non-competitive
systems. Effective September 1, 1993, regulated cable systems not electing
cost-of-service were required to reduce rates to the higher of the
prescribed benchmarks or rates that were 10 percent below those in effect
on September 1, 1992.
16
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
In February 1994, the FCC announced further changes in its rate regulation
rules and announced its interim cost-of-service standards. In connection
with these changes, the FCC issued revised benchmark formulas, based on a
revised competitive differential of 17 percent, which became effective on
May 15, 1994 or if certain conditions were met, on July 14, 1994. Regulated
cable systems were required to reduce rates to the higher of the new FCC
prescribed benchmarks or rates that were 17 percent below those in effect
on September 1, 1992.
17
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
(8) CONTINUED
On February 1, 1996 Congress passed S.652, "The Telecommunications Act of
1996" (the "Act"), which was subsequently signed into law on February 8,
1996. This new law will alter federal, state and local laws and regulations
for telecommunications providers and services, including the Company. There
are numerous rulemakings to be undertaken by the FCC which will interpret
and implement the Act. It is not possible at this time to predict the
outcome of such rulemakings. Several aspects of the Act impact cable
television, including the elimination of regulation of the cable
programming service tier as of March 31, 1999.
The Partnership believes that it has complied with all provisions of the
1992 Cable Act, including the rate setting provisions promulgated by the
FCC. However, in jurisdictions which have chosen not to certify, refunds
covering a one-year period of basic service may be ordered upon
certification if the Partnership is unable to justify its rates. The amount
of refund liability, if any, to which the Partnership could be subject in
the event that these systems' rates are successfully challenged by
franchising authorities is not currently estimable.
Franchising authorities in various communities in which the Partnership
operates its cable television system have initiated basic service rate
regulation pursuant to Section 623 of the Communications Act of 1934, as
amended (the "Communications Act"), and corresponding regulations of the
FCC. Complaints have been filed with the FCC by various subscribers and
franchising authorities pursuant to Section 623 of the Communications Act
and corresponding FCC regulations challenging the reasonableness of the
Partnership's rate for its cable programming service tier. The prior owner
of the Cable television system, MultiVision Cable TV, and the Partnership
have submitted rate justifications to these franchising authorities and
filed responses to the rate complaints with the FCC. Management of the
Partnership and its legal counsel believe that the outcome of the local
rate proceedings and the rate complaints at the FCC cannot be predicted at
this time.
(9) SUBSEQUENT EVENT
On January 31, 1997, Jones Communications of Maryland, Inc., a subsidiary
of Jones Intercable, Inc., acquired substantially all of the assets and
liabilities of the Partnership
18
<PAGE>
MARYLAND CABLE PARTNERS, L.P.
Notes to Financial Statements
- --------------------------------------------------------------------------------
for a purchase price of $235 million. In connection with the terms of the
purchase agreement, the loans described in note 4 were repaid in full in
February 1997.
19
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
On January 31, 1997, Jones Intercable, Inc. and subsidiaries (the
"Company"), pursuant to an agreement with Maryland Cable Partners, L.P., an
unaffiliated party, purchased the cable television system serving the
communities of Berwyn Heights, Bladensburg, Bowie, Brentwood, Cheverly, College
Park, Colmar Manor, Cottage City, Edmonston, Glenarden, Greenbelt, Hyattsville,
Landover Hills, Laurel, Mt. Rainer, New Carrollton, North Brentwood, Riverdale,
Takoma Park, University Park and portions of South Prince Georges County, all in
the State of Maryland (the "North Prince Georges County System"). The purchase
price was $231,367,000. The purchase of the North Prince Georges County System
was funded by borrowings under JCH's revolving credit facility. The Company
paid Jones Financial Group, Ltd. ("Financial Group") a fee of $2,115,000 upon
closing of this transaction for acting as the Company's financial advisor in
connection with this transaction. All fees paid to Financial Group by the
Company are based upon 90% of the estimated commercial rate charged by
unaffiliated financial advisors. The North Prince Georges County System is
contiguous to the Company's South Prince Georges County System. The acquisition
of the North Prince Georges County System allows the Company to serve all
160,000 subscribers in Prince Georges County and brings the Company's owned and
managed subscriber count in the Washington, D.C. area to approximately 400,000
subscribers.
The Unaudited Pro Forma Consolidated Balance Sheet reflects the
acquisition of the North Prince Georges County System as if the transaction had
occurred as of December 31, 1996. The Unaudited Pro Forma Statement of
Operations for the year ended December 31, 1996 reflects the acquisition of the
North Prince Georges County System, as well as the acquisition of the cable
television systems serving areas in and around Manassas, Virginia (the "Manassas
System"), South Prince Georges County, Maryland (the "Prince Georges County
System"), Reston, Virginia (the "Reston System"), Savannah, Georgia (the
"Savannah System"), the sale of Jones Galactic Radio, Inc. and the sale of Jones
Satellite Programming, Inc.'s assets as if the transactions had occurred on
January 1, 1996.
The capital required to complete the acquisition of the North Prince
Georges County System was provided by JCH's Revolving Credit Facility.
The Unaudited Pro Forma Financial Statements should be read in
conjunction with the Notes to Unaudited Pro Forma Financial Statements. The
Unaudited Pro Forma Statement of Operations is based on historical data and may
not be indicative of actual results obtained due to these transactions.
<PAGE>
JONES INTERCABLE, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
December 31, 1996
<TABLE>
<CAPTION>
Pro Forma
Adjustments
-----------
As North Prince
Reported Georges County Pro Forma
12/31/96 System 12/31/96
-------- -------------- ---------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 1,671 $ - $ 1,671
RESTRICTED CASH 1,016 - 1,016
RECEIVABLES 21,285 - 21,285
INVESTMENT IN CABLE TELEVISION
PROPERTIES
Property, plant and equipment, net 384,410 57,842 442,252
Franchise Costs and Other Intangibles,
net 492,219 173,525 665,744
Investments in Domestic Partnerships 31,483 - 31,483
Investments in Foreign Partnerships 111,767 - 111,767
---------- --------- ----------
Total investment 1,019,879 231,367 1,251,246
DEFERRED TAX ASSET, NET 3,862 - 3,862
DEPOSITS, PREPAIDS AND OTHER 86,416 - 86,416
---------- --------- ----------
TOTAL ASSETS $1,134,129 $ 231,367 $1,365,496
========== ========== ==========
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
LIABILITIES
Accounts payable and accrued liabilities $ 89,563 $ - $ 89,563
Subscriber prepayments and deposits 3,112 - 3,112
Subordinated debentures and other debt 463,147 - 463,147
Credit Facilities 343,000 231,367 574,367
---------- --------- ----------
Total liabilities 898,822 231,367 1,130,189
---------- --------- ----------
SHAREHOLDERS' INVESTMENT
Class A Common Stock 263 - 263
Common Stock 51 - 51
Additional Paid-in Capital 395,278 - 395,278
Accumulated Deficit (207,557) - (207,557)
Unrealized Gain 47,272 - 47,272
---------- --------- ----------
Total shareholders' investment 235,307 235,307
---------- --------- ----------
Total Liabilities and Shareholders' Investment $1,134,129 $ 231,367 $1,365,496
========== ========= ==========
</TABLE>
2
<PAGE>
JONES INTERCABLE, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------------
As Other North Prince
Reported Sales and Georges County
12/31/96 Acquisitions System Total
----------- ------------ ------------ ---------
(In Thousands Except Per Share Data)
<C> <S> <S> <S> <S>
REVENUES FROM CABLE
TELEVISION OPERATIONS:
Cable Television Revenue
Subscriber service fees $ 248,626 $ 11,567 $ 52,000 $ 312,193
Management fees 19,104 (457) - 18,647
Distributions and brokerage fees 15,483 - - 15,483
Non-cable Revenue 28,497 (8,963) - 19,534
------- ------ ------- -------
TOTAL REVENUES 311,710 2,147 52,000 365,857
COSTS AND EXPENSES:
Cable Television Expenses
Operating expenses 131,529 5,459 28,500 165,488
General and administrative
expenses 16,586 667 2,100 19,353
Non-cable operating, general
and administrative 28,410 (9,417) - 18,993
Depreciation and amortization 131,186 4,332 23,500 159,018
------- ------ ------- -------
OPERATING INCOME 3,999 1,106 (2,100) 3,005
OTHER INCOME (EXPENSE):
Interest expense (67,782) (3,351) (15,275) (86,408)
Equity in income (losses)
of affiliated entities (3,473) - - (3,473)
Interest income 3,758 - - 3,758
Gain on sale of assets 5,262 - - 5,262
Other, net (4,424) - - (4,424)
------- ------ ------- -------
LOSS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM (62,660) (2,245) (17,375) (82,280)
Income tax provision - - - -
------- ------ ------- -------
LOSS BEFORE EXTRAORDINARY
ITEM (62,660) (2,245) (17,375) (82,280)
EXTRAORDINARY ITEM
Loss on early extinguishment of debt, net
of related income taxes - - - -
------- ------ ------- -------
NET LOSS $ (62,660) $ (2,245) $ (17,375) $ (82,280)
======= ====== ======= =======
</TABLE>
3
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NOTES TO UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
(1) The Unaudited Pro Forma Consolidated Balance Sheet reflects the acquisition
of the North Prince Georges County System as if the transaction had
occurred as of December 31, 1996. The Unaudited Pro Forma Statement of
Operations for the year ended December 31, 1996 reflects the acquisition of
the Savannah System, as well as the acquisition of the cable television
systems serving areas in and around Manassas, Virginia (the "Manassas
System"), South Prince Georges County, Maryland (the "Prince Georges County
System") and Reston, Virginia (the "Reston System"), Savannah, Georgia (the
"Savannah System"), the sale of Jones Galactic Radio, Inc. and the sale of
the assets of Jones Satellite Programming, Inc., as if the transactions had
occurred on January 1, 1996.
(2) The basis for the Unaudited Pro Forma Consolidated Statement of Operations
is the historical financials of the Company, the Savannah System, the South
Prince Georges County System, the Reston System and the Manassas System.
The depreciation and amortization of the acquired systems has been adjusted
to reflect the Company's basis in the assets. Interest expense has been
adjusted as a result of changes in debt balances due to the above
transactions. In addition, management fee revenue has been reduced to
reflect the sale of certain partnership systems in connection with the
above acquisitions.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JONES INTERCABLE, INC.
a Colorado corporation
Dated: April 14, 1997 By: /S/ Larry W. Kaschinske
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Larry W. Kaschinske
Controller
(Principal Accounting Officer)
