<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 33-62537
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 27, 1995)
$250,000,000
[LOGO OF JONES INTERCABLE, INC. APPEARS HERE]
8 7/8% SENIOR NOTES DUE 2007
------------------
Interest Payable April 1 and October 1
------------------
The 8 7/8% Senior Notes due 2007 (the "Notes") of Jones Intercable, Inc.
(the "Company") will mature on April 1, 2007. Interest on the Notes is payable
semiannually on April 1 and October 1, commencing October 1, 1997. The Notes
will not be redeemable prior to April 1, 2004. The Notes will be redeemable on
or after April 1, 2004 at the option of the Company, in whole or in part, at
the redemption prices set forth herein, plus accrued interest to the date of
redemption.
The Notes will be senior unsecured obligations of the Company, ranking pari
passu in right of payment with all existing and future senior indebtedness of
the Company.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public(1) Discounts(2) Company(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............................... 99.440% 1.799% 97.641%
- --------------------------------------------------------------------------------
Total.................................. $248,600,000 $4,497,500 $244,102,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of expenses payable by the Company, estimated to be
$10,000.
------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the Notes
will be made at the office of Lehman Brothers Inc., New York, New York or
through the facilities of The Depository Trust Company, on or about March 21,
1997.
------------------
LEHMAN BROTHERS
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
TD SECURITIES
March 18, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF NOTES PRIOR TO THE PRICING OF THE
OFFERING FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE NOTES, THE PURCHASE
OF NOTES FOLLOWING THE PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT
POSITION IN THE NOTES OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE
NOTES, AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
THE COMPANY
Jones Intercable, Inc. (the "Company") acquires, develops and operates cable
television systems for itself and for its managed limited partnerships. Based
on the number of basic subscribers served by the Company's owned and managed
cable television systems, the Company is one of the largest cable television
system operators in the United States. As of December 31, 1996, the Company
owned or managed 47 cable television systems serving a total of approximately
1,450,000 basic subscribers in 19 states. Glenn R. Jones, the founder,
Chairman, Chief Executive Officer and controlling shareholder of the Company,
is one of the pioneers in the cable television industry and has owned and
operated cable television systems since 1970.
THE OFFERING
Securities Offered Hereby ... $250,000,000 of 8 7/8% Senior Notes.
Maturity Date ............... April 1, 2007.
Interest Payment Dates ...... April 1 and October 1 of each year, commencing
October 1, 1997.
Redemption .................. The Notes will not be redeemable prior to April
1, 2004. The Notes will be redeemable on or
after April 1, 2004 at the option of the
Company, in whole or in part, at the redemption
prices set forth herein, plus accrued interest
to the date of redemption. The Notes will not
be subject to any mandatory redemption or
sinking fund.
Ranking ..................... The Notes will be senior unsecured obligations
of the Company, ranking equally with all other
senior unsecured obligations of the Company.
Restrictive Covenants ....... The Indenture contains certain covenants, which
restrict (among other things) the ability of
the Company and certain of its subsidiaries to
incur indebtedness, pay dividends or make stock
purchases, consummate mergers or make certain
asset dispositions. Such covenants are
substantially similar to the covenants
applicable to the Company's 9 5/8% Senior Notes
due 2002. See "Description of the Notes."
Use of Proceeds ............. To retire the $160 million outstanding issue of
11.5% Subordinated Debentures due 2004 (the
"11.5% Debentures") at 106.75% of the principal
amount thereof and for general corporate
purposes. The 11.5% Debentures are redeemable
on July 15, 1997. Pending any such use of the
proceeds, the proceeds will be applied to
reduce the amounts outstanding under the
Company's revolving credit facilities.
S-2
<PAGE>
RECENT DEVELOPMENTS
PROPOSED ACQUISITIONS OF CABLE TELEVISION SYSTEMS IN 1997
In February 1997, the Company entered into an asset purchase agreement to
acquire from Jones Intercable Investors, L.P., a Colorado limited partnership
managed by the Company, the cable television system serving communities in and
around Independence, Missouri (the "Independence System") for a purchase price
of $171,213,667, which represents the average of three independent appraisals
of the fair market value of the Independence System. The Company anticipates
that it will receive a limited partner distribution totaling approximately
$25,700,000 from the sale by the partnership of the Independence System
because of the Company's equity interest in the partnership. The partnership
will pay The Jones Group, Ltd., a wholly owned subsidiary of the Company, a
$4,280,342 fee in connection with this transaction. The closing of the
Company's purchase of the Independence System is subject to the consents of
governmental authorities and other third parties and is expected to occur in
the third or fourth quarter of 1997.
In September 1995, the Company entered into an asset purchase agreement to
purchase from Cable TV Joint Fund 11, a venture comprised of four Company-
managed partnerships, the cable television system serving the City of
Manitowoc, Wisconsin (the "Manitowoc System"). Under the terms of the asset
purchase agreement, as amended in September 1996 to extend the period in which
to close the transaction to June 30, 1997, the purchase price for the
Manitowoc System will be $16,122,333, subject to closing adjustments. The
Company anticipates that it will receive, from the four partnerships that
comprise the venture, general partner distributions totaling approximately
$4,518,000 upon the closing of the sale of the Manitowoc System. The closing
of the Company's purchase of the Manitowoc System is subject to the approval
of the limited partners of each of the partnerships that comprise the venture.
The closing of this transaction is expected to occur during the second quarter
of 1997.
PROPOSED DISPOSITIONS OF CABLE TELEVISION SYSTEMS IN 1997
In August 1996, the Company entered into an asset purchase agreement with an
unaffiliated party to sell the Company-owned cable television systems serving
areas in and around Walnut Valley and Oxnard, both in the State of California,
for $104,000,000, subject to closing adjustments. The closing of this sale is
subject to a number of closing conditions, including necessary governmental
and other third party consents, and is expected to occur during the second
quarter of 1997.
PROPOSED EXCHANGE OF CABLE TELEVISION SYSTEMS IN 1997
In October 1996, the Company entered into an asset exchange agreement with
an unaffiliated cable television system operator. Pursuant to the exchange
agreement, the Company will convey to the unaffiliated cable system operator
the Company-owned cable television systems serving areas in and around
Evergreen, Idaho Springs and Jefferson County, all in the State of Colorado,
in exchange for the other party's cable television system serving areas in and
around Annapolis, southern Anne Arundel County and the Naval Academy, all in
the State of Maryland, and cash in the amount of $2,500,000, subject to normal
closing adjustments. The transaction is subject to a number of closing
conditions, including necessary governmental and other third party consents,
and is expected to be completed in the second quarter of 1997.
USE OF PROCEEDS
The net proceeds to the Company from this offering are estimated to be
$244,092,500, after payment of estimated expenses. The Company anticipates
that, if all conditions to closing are met, the net proceeds will be used to
retire the $160 million outstanding issue of the 11.5% Debentures at 106.75%
of the principal amount thereof and for general corporate purposes. The 11.5%
Debentures are redeemable on July 15, 1997. Pending any such use of the
proceeds, the proceeds will be applied to reduce the amounts outstanding under
the Company's revolving credit facilities.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1996; pro forma to reflect the acquisition of the North Prince
Georges County System on January 31, 1997 for approximately $231,367,000; and
as adjusted to reflect the retirement of the 11.5% Debentures, the repayment
of a portion of the Company's revolving credit facilities and the issuance of
the Notes.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
------------------------------------------
AS REPORTED PRO FORMA (1) AS ADJUSTED (2)
----------- ------------- ---------------
(STATED IN THOUSANDS)
<S> <C> <C> <C>
Cash and cash equivalents............ $ 1,671 $ 1,671 $ 1,671
========== ========== ==========
Debt:
Revolving credit facilities........ $ 343,000 $ 562,367 $ 489,074
8 7/8% Senior Notes due 2007, net
of unamortized discount........... -- -- 248,600
9 5/8% Senior Notes due 2002....... 200,000 200,000 200,000
11.5% Subordinated Debentures due
2004.............................. 160,000 160,000 --
10.5% Subordinated Debentures due
2008.............................. 100,000 100,000 100,000
Other.............................. 3,147 3,147 3,147
---------- ---------- ----------
Total Debt....................... 806,147 1,025,514 1,040,821
---------- ---------- ----------
Shareholders' Investment:
Class A Common Stock, $.01 par
value, 60,000,000 shares
authorized; 26,264,523 shares
issued............................ 263 263 263
Common Stock, $.01 par value,
5,550,000 shares authorized;
5,113,021 shares issued........... 51 51 51
Additional paid-in capital......... 395,278 395,278 395,278
Unrealized holding gain on
marketable securities............. 47,272 47,272 47,272
Accumulated deficit................ (207,557) (207,557) (218,357)
---------- ---------- ----------
Total Shareholders' Investment... 235,307 235,307 224,507
---------- ---------- ----------
Total Capitalization............. $1,041,454 $1,260,821 $1,265,328
========== ========== ==========
</TABLE>
- --------
(1) Pro forma to reflect the acquisition of the North Prince Georges County
System on January 31, 1997 for approximately $231,367,000. Net borrowings
of $219,367,000 reflect the purchase price less a deposit of $12,000,000.
The pro forma presentation does not reflect the transactions described in
"Recent Developments."
(2) Reflects the issuance of the Notes and the application of the net proceeds
therefrom as follows: $170,800,000 for the retirement of the 11.5%
Debentures, $73,292,500 for the repayment of a portion of the outstanding
balance of the revolving credit facilities. Although the 11.5% Debentures
are not redeemable until July 15, 1997, the "as adjusted" presentation
assumes redemption of the 11.5% Debentures on January 1, 1996.
S-4
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial data regarding the
financial position and operating results of the Company and its subsidiaries.
This data should be read in conjunction with the Company's consolidated
financial statements and the notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing in the
Company's Annual Report on Form 10-K for the year ending December 31, 1996,
which is incorporated by reference herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- -------- ----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Subscriber service fees.. $ 82,033 $ 99,438 $103,335 $135,350 $ 248,626
Management fees.......... 16,820 17,255 17,952 21,462 19,104
Distributions and
brokerage fees.......... -- -- -- -- 15,483
Non cable revenue........ 6,943 7,624 10,602 32,026 28,497
-------- -------- -------- -------- ----------
Total revenues............. 105,796 124,317 131,889 188,838 311,710
Costs and expenses:
Cable operating expenses. 38,579 54,307 55,196 77,638 131,529
Cable general &
administrative expenses. 9,304 10,034 8,120 8,284 16,586
Non cable operating,
general &
administrative.......... 6,793 7,989 11,810 32,382 28,410
Depreciation and
amortization............ 39,597 43,328 45,585 55,805 131,186
-------- -------- -------- -------- ----------
Operating income (loss).... 11,523 8,659 11,178 14,729 3,999
Other income (expense):
Interest expense......... (38,112) (40,780) (36,883) (49,552) (67,782)
Interest income.......... 4,851 3,919 5,886 14,383 3,758
Equity in losses of
affiliated entities..... (3,997) (3,817) (3,707) (58) (3,473)
Gain (loss) on sale of
assets.................. 0 (3,231) 15,496 -- 5,262
Other, net............... (573) (816) (661) (526) (4,424)
-------- -------- -------- -------- ----------
Loss before income taxes,
extraordinary items and
accounting change......... (26,308) (36,066) (8,691) (21,024) (62,660)
Income tax benefit
(provision)............... -- -- -- -- --
-------- -------- -------- -------- ----------
Loss before extraordinary
items and accounting
change.................... (26,308) (36,066) (8,691) (21,024) (62,660)
Extraordinary items:
Gain (loss) on early
extinguishment of debt.. (11,409) -- -- (692) --
Cumulative effect of change
in accounting method:
Change in method of
accounting for income
taxes................... 3,862 -- -- -- --
-------- -------- -------- -------- ----------
Net loss................... $(33,855) $(36,066) $ (8,691) $(21,716) $ (62,660)
======== ======== ======== ======== ==========
Primary loss per share..... $ (2.63) $ (2.92) $ (0.45) $ (0.69) $ (2.00)
======== ======== ======== ======== ==========
Ratio of earnings to fixed
charges(1)................ -- -- -- -- --
OTHER FINANCIAL DATA:
Operating income before
depreciation and
amortization and excluding
distributions and
brokerage fees............ $ 51,120 $ 51,987 $ 56,763 $ 70,534 $ 119,702
Capital expenditures....... 22,361 20,155 28,801 63,216 95,900
BALANCE SHEET DATA (AT END
OF PERIOD):
Total assets............... $434,670 $434,298 $608,289 $860,499 $1,134,129
Total debt................. 382,245 372,908 281,578 492,714 806,147
Shareholders' investment... 13,996 17,503 271,284 292,795 235,307
</TABLE>
- -------
(1) The ratio of earnings to fixed charges has been computed by dividing the
sum of (a) pre-tax income, excluding in losses of affiliated entities and
(b) interest expense, by net interest expenses. Interest expense includes
interest expense on all indebtedness (including amortization of deferred
debt issuance costs). Earnings were insufficient to cover fixed charges by
$29,858,000, $32,249,000, $4,984,000, $21,658,000 and $59,187,000 for the
years ended December 31, 1992, 1993, 1994, 1995 and 1996, respectively.
S-5
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes supplements
and, to the extent inconsistent therewith, replaces the description of the
general terms of the Debt Securities set forth under the heading "Description
of Debt Securities" in the accompanying Prospectus, to which description
reference is made. The Notes will be issued pursuant to an Indenture dated as
of March 23, 1995 between the Company and U.S. Trust Company of California,
N.A., as trustee (the "Trustee"), as supplemented by a Second Supplemental
Indenture dated March 21, 1997 (such Indenture and Second Supplemental
Indenture, collectively, the "Indenture"). The Indenture is referred to in the
Prospectus as the "Senior Indenture." The Notes are "Senior Debt Securities"
as that term is used in the Prospectus and are also referred to in the
Prospectus as the "Offered Debt Securities."
GENERAL
The Notes are limited to $250,000,000 aggregate principal amount and will be
issued in fully registered form, without coupons, in denominations of $1,000
and integral multiples thereof. The Notes will mature on April 1, 2007 (the
"Maturity Date").
The Notes will bear interest from March 21, 1997 at a rate of 8 7/8% per
annum, payable semiannually on April 1 and October 1 of each year, commencing
October 1, 1997, to the person in whose name each Note was registered at the
close of business on the preceding March 15 and September 15, respectively,
subject to certain exceptions.
OPTIONAL REDEMPTION
The Notes will not be redeemable by the Company prior to April 1, 2004. From
April 1, 2004 until March 31, 2005, the Notes will be redeemable, in whole or
in part, on at least 30 and not more than 60 days' notice at the option of the
Company from time to time at 101.109% of principal amount, together with
accrued interest to the date fixed for redemption. On or after April 1, 2005,
the Notes will be redeemable, in whole or in part, on at least 30 and not more
than 60 days' notice at the option of the Company from time to time at
100.000% of principal amount, together with accrued interest to the date fixed
for redemption.
In the event of any redemption of less than all the outstanding Notes
pursuant to the foregoing provisions, the particular Notes (or portions
thereof in integral multiples of $1,000) to be redeemed will be selected by
the Trustee pro rata, by lot or by such other method as the Trustee shall deem
fair and appropriate.
SINKING FUND
The Notes will not be subject to any mandatory sinking fund or redemption.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which no
definition is provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), when used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities or by agreement or otherwise.
S-6
<PAGE>
"Affiliated Partnership" means any general or limited partnership, joint
venture or other entity of a similar nature of which the Company or any
Subsidiary is general or managing partner or venturer and of which the Company
or any Subsidiary owns or controls at least a 0.5% interest.
"Annualized Pro Forma Operating Cash Flow" means Pro Forma Operating Cash
Flow for the latest fiscal quarter ended prior to the date as of which the
Annualized Pro Forma Operating Cash Flow is being determined multiplied by
four.
"Asset Sale" means the sale, transfer, or other disposition (other than to
the Company or any of its Subsidiaries) in any single transaction or series of
related transactions of (a) any Capital Stock of any Subsidiary, (b) all or
substantially all of the assets of the Company or any Subsidiary or (c) all or
substantially all of the assets of a division, line of business, cable
television system, or comparable business segment of the Company or any
Subsidiary.
"Capital Stock" means in respect of any Person, any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) corporate stock.
"Capitalized Lease Obligation" means as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"Cash Flow Available for Interest Expense" means, for any Person, for any
period, (A) the sum of the amount for such period of (i) Net Income, (ii)
Interest Expense, (iii) provisions for taxes based on income (excluding taxes
related to gains and losses excluded from the definition of Net Income), (iv)
depreciation expense, (v) amortization expense, and (vi) any other non-cash
items reducing the Net Income of such Person for such period, minus (B) all
non-cash items increasing the Net Income of such Person, all as determined on
a consolidated basis in accordance with GAAP; provided that if, during such
period, such Person shall have made any Asset Sale, Cash Flow Available for
Interest Expense of such Person for such period shall be reduced by an amount
equal to the Cash Flow Available for Interest Expense (if positive) directly
attributable to the assets which are the subject of such Asset Sale for the
period or increased by an amount equal to the Cash Flow Available for Interest
Expense (if negative) directly attributable thereto for such period.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect
against fluctuations in currency values.
"Debt" of any Person means (without duplication) any indebtedness,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to
a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (except any such balance that constitutes a trade
payable or an accrued liability arising in the ordinary course of business
that is not overdue by more than 120 days or that is being contested in good
faith), if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet of the Company in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession as in effect on the date of the Indenture Supplement.
"Indebtedness" of any Person shall mean the Debt of such Person and shall
also include, to the extent not otherwise included, any Capitalized Lease
Obligation, the maximum fixed repurchase price of any Redeemable Stock, the
aggregate liquidation preference of the issued and outstanding shares of
preferred stock of any Subsidiary, indebtedness secured by a Lien to which the
property or assets owned or held by such Person are
S-7
<PAGE>
subject (whether or not the obligations secured thereby shall have been
assumed), guarantees of items that would constitute Indebtedness under this
definition (whether or not such items would appear upon the balance sheet of
such Person), letters of credit and letter of credit reimbursement obligations
(whether or not such items would appear on such balance sheet), and
obligations in respect of Currency Agreements and Interest Swap Obligations,
and any renewal, extension, refunding or amendment of any of the foregoing.
For purposes of the preceding sentence, the maximum fixed repurchase price
shall be calculated in accordance with the terms of such Redeemable Stock as
if such Redeemable Stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such
price is based upon or measured by the fair market value of such Redeemable
Stock (or any equity security for which it may be exchanged or converted),
such fair market value shall be determined in good faith by the Board of
Directors. The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such contingent obligations at such
date.
"Interest Expense" of any Person means, for any period, the aggregate amount
of (i) interest in respect of Indebtedness of such Person (excluding interest
attributable to cable television systems held for resale and including
amortization of original issue discount on any such Indebtedness and the
interest portion of any deferred payment obligation, calculated in accordance
with the effective interest method of accounting, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and the net costs associated with Interest Swap
Obligations and Currency Agreements), and (ii) all but the principal component
of rentals in respect of Capitalized Lease Obligations paid, accrued or
scheduled to be paid or accrued by such Person during such period.
"Interest Swap Obligations" shall mean the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payment made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount.
"Lien" means any lien, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, and any agreement to give any security interest).
"Net Income" of any Person shall mean the net income (loss) of such Person,
determined in accordance with GAAP, excluding, however, (i) any gain or loss
realized upon an Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) of such Person not in the
ordinary course of business, and (ii) the amount of any non-recurring
distribution from any Affiliated Partnership and (iii) any extraordinary gain
or loss.
"Pro Forma Operating Cash Flow" means, for any period, (A) the sum of the
amount for such period of (i) Net Income, (ii) Interest Expense, (iii)
provisions for taxes based on income (excluding taxes related to gains and
losses excluded from the definition of Net Income), (iv) depreciation expense,
(v) amortization expense, (vi) any other non-cash items reducing the Net
Income of such Person for such period, minus (B) all non-cash items increasing
the Net Income of such Person for such period; all as determined on a
consolidated basis for the Company and its Subsidiaries in accordance with
GAAP after giving effect to the following: (i) if, during such period, the
Company or any Subsidiary shall have any cable television systems held for
resale, to the extent not otherwise included, Pro Forma Operating Cash Flow of
the Company for such period shall be increased by an amount equal to Pro Forma
Operating Cash Flow (if positive) of such cable television system held for
resale for such period or decreased by an amount equal to the Pro Forma
Operating Cash Flow (if negative) directly attributable thereto for such
period; (ii) if, during such period, the Company or any of its Subsidiaries
shall have made any Asset Sale, Pro Forma Operating Cash Flow of the Company
for such period shall be reduced by an amount equal to the Pro Forma Operating
Cash Flow (if positive) directly attributable to the assets which are the
subject of such Asset Sale for the period or increased by an amount equal to
the Pro Forma Operating Cash
S-8
<PAGE>
Flow (if negative) directly attributable thereto for such period, and (iii)
if, during such period, Indebtedness is incurred by the Company or any of its
Subsidiaries for or in connection with the acquisition of any Person or
business which immediately after acquisition is a Subsidiary or whose assets
are held directly by the Company or a Subsidiary, Pro Forma Operating Cash
Flow shall be computed so as to give pro forma effect to the acquisition of
such Person or business as if such acquisition had occurred as of the first
day of such period.
"Redeemable Stock" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Maturity Date (as defined in the Indenture) of the Notes.
"Restricted Payment" shall mean, with respect to any Person, (i) the
declaration or payment of any dividend on, or the making of any distribution
to the holders (as such) of, any shares of its Capital Stock (other than (A)
dividends or distributions payable in Capital Stock (other than Redeemable
Stock) of the Company, or (B) dividends or distributions from a Subsidiary to
any wholly owned Subsidiary or to the Company); or (ii) the direct or indirect
purchase, redemption or other acquisition or retirement for value of any
Capital Stock of such Person; or (iii) any direct or indirect payment to
redeem, repurchase, defease or otherwise acquire or retire for value, prior to
any scheduled maturity, scheduled repayment or scheduled sinking fund payment,
any Indebtedness of the Company that (a) is subordinate in right of payment to
the Notes and (b) has a scheduled final maturity subsequent to the Maturity
Date of the Notes.
"Significant Subsidiary" shall have the meaning ascribed to it in Rule 1-02
of Regulation S-X of the Securities and Exchange Commission.
"Subsidiary" of any specified Person means a corporation whose Capital Stock
with voting power, under ordinary circumstances, to elect a majority of
directors is at any time, directly or indirectly, owned by such Person or by
such Person and a Subsidiary or Subsidiaries of such Person or by a Subsidiary
or Subsidiaries of such Person.
CERTAIN COVENANTS
Limitation on Restricted Payments. The Indenture provides that the Company
will not, and will not permit any Subsidiary to, make any Restricted Payment
if at the time of making such Restricted Payment (a) an Event of Default (as
defined in the Indenture) shall have occurred and be continuing, or shall
occur as a consequence thereof, or (b) if upon giving effect to such payment
the aggregate amount expended for all such Restricted Payments subsequent to
February 29, 1992 shall exceed the sum of (i) the excess of (X) the aggregate
of Cash Flow Available for Interest Expense of the Company and its
Subsidiaries on a consolidated basis, accrued during all fiscal quarters ended
subsequent to February 29, 1992 over (Y) the product of (1) 1.2 and (2) the
aggregate of Interest Expense of the Company and its Subsidiaries on a
consolidated basis, accrued during all fiscal quarters ended subsequent to
February 29, 1992, (ii) the net proceeds received by the Company from the
issuance or sale, after February 29, 1992, of Capital Stock of the Company
(other than Redeemable Stock) and of any convertible securities which have
been converted into Capital Stock (other than Redeemable Stock), and (iii)
$15,000,000.
The foregoing provisions will not prohibit (i) the payment of any dividend
within 60 days after the date of declaration when the payment would have
complied with the dividend restriction set forth above on the date of
declaration; (ii) the retirement of any shares of the Company's Capital Stock
in exchange for, or out of the net proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other shares of the
Company's Capital Stock (other than Redeemable Stock); and (iii) the
redemption, repurchase or retirement of any Indebtedness which is subordinated
to the Notes with the proceeds of, or in exchange for (a) any Indebtedness of
the Company which (x) is subordinate in right of payment to the Notes and (y)
has a scheduled final maturity subsequent to the Maturity Date of the Notes,
or (b) any shares of the Company's Capital Stock other than Redeemable Stock.
S-9
<PAGE>
Limitation on Additional Indebtedness. The Indenture provides that the
Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, issue, assume or become liable for, contingently or
otherwise (collectively an "incurrence"), any Indebtedness (other than the
Notes) unless, after giving effect to such incurrence on a pro forma basis,
Indebtedness of the Company and its Subsidiaries, on a consolidated basis,
shall not be more than nine times Annualized Pro Forma Operating Cash Flow for
the latest fiscal quarter preceding such incurrence for which financial
statements are available. Notwithstanding the above, the Indenture does not
limit (i) Indebtedness incurred in connection with Currency Agreements or
Interest Swap Obligations, (ii) Indebtedness outstanding on the date of the
Indenture, (iii) letters of credit and letter of credit reimbursement
obligations that support performance obligations not to exceed $15,000,000 in
the aggregate outstanding at any time, and (iv) Indebtedness resulting from
the extension, refunding or renewal of any Indebtedness existing prior to such
extension, renewal or refunding which does not result in an increase in the
principal amount of such existing Indebtedness then outstanding or, in the
case of existing Indebtedness which matures subsequent to the Maturity Date of
the Notes, does not result in the maturity of such Indebtedness prior to the
Maturity Date of the Notes or, if the existing Indebtedness is subordinated in
right of payment to the Notes, the Indebtedness resulting from such extension,
renewal or refunding is also subordinated in right of payment to the Notes.
Limitation on Transactions with Affiliates. The Indenture provides that the
Company will not, and will not permit any Subsidiary to, engage in any single
transaction or series of related transactions having a value in excess of
$10,000,000 with an Affiliate of the Company (other than a Subsidiary), or any
director, officer or employee of the Company or any Subsidiary, except for (i)
any payment for goods or services purchased in the ordinary course of
business, (ii) temporary loans or advances to any Affiliated Partnership on a
basis consistent with past practice, (iii) allocation of corporate overhead to
Affiliates of the Company and to the Company and its Subsidiaries on a basis
which is fair and reasonable, and (iv) the making of any payment pursuant to
any agreement or arrangement with any Affiliate entered into prior to the date
of the Indenture. Notwithstanding the foregoing, such provision shall not
prohibit any such transaction, the terms of which, taken as a whole, are
determined by the Board of Directors of the Company to be fair and in the best
interests of the Company or any Subsidiary.
EVENTS OF DEFAULT
An Event of Default is defined in the Indenture with respect to the Notes as
a default in payment of principal of, or premium, if any, on the Notes at
maturity or upon redemption; a default in payment of interest on the Notes,
and continuance of such default, for a period of 30 days; a failure by the
Company for 60 days after written notice by the Trustee or by the holders of
at least 25% in principal amount of the Notes at the time outstanding to
perform any other of the covenants or agreements in the Indenture; certain
events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary; default in the payment at final maturity of principal
or premium, if any, aggregating $5,000,000 or more with respect to any
Indebtedness of the Company or any Subsidiary or the acceleration of any such
Indebtedness, which default shall not be cured or waived, or which
acceleration shall not be rescinded or annulled or a rendering of a final
judgment in excess of $5,000,000 against the Company or any Subsidiary that is
not discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect. For purposes of the foregoing, final
maturity shall mean, in the case of Indebtedness which is payable in
installments, the date on which the last installment of such Indebtedness is
due or the date on which such Indebtedness is due as the result of the
acceleration thereof.
The Indenture provides that, if an Event of Default shall have occurred and
be continuing, either the Trustee or the holders of 25% in principal amount of
the Notes then outstanding, by notice in writing to the Company (and to the
Trustee if given by holders of the Notes), may declare the principal of all
the Notes to be due and payable immediately. Notwithstanding the foregoing,
upon certain conditions such declaration may be annulled and past defaults may
be waived by the holders of a majority in principal amount of the Notes then
outstanding. The holders of a majority in principal amount of the Notes then
outstanding may also waive any default (except a default in payment of
principal or interest on the Notes) prior to such declaration. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events
of bankruptcy, insolvency or reorganization, all outstanding Notes will become
due and payable without further action or notice.
S-10
<PAGE>
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of its assets as an entirety or
substantially as an entirety to, any Person unless (i) the Company is the
surviving Person or the successor or transferee is a corporation or organized
and existing under the laws of the United States, any state thereof or the
District of Columbia, (ii) the successor assumes all the obligations of the
Company under the Notes and the Indenture, (iii) after such transaction no
default in the observance of any terms or covenants of the Indenture or Event
of Default exists, and (iv) immediately after giving effect to such
transaction on a pro forma basis, the consolidated Indebtedness of the Person
formed by or surviving any such consolidation or merger, or to which such
sale, assignment, transfer, lease or conveyance or disposition has been made
would not be more than nine times Annualized Pro Forma Operating Cash Flow for
the latest fiscal quarter preceding such transaction for which financial
statements are available.
MODIFICATION OF THE INDENTURE
The Company and the Trustee, with the consent of the holders of not less
than a majority of the aggregate principal amount of the Notes at the time
outstanding, may execute supplemental indentures adding, changing or
eliminating stated provisions with respect to the Notes or the Indenture or of
any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; however, no such supplemental indenture may (i) extend
the stated maturity of the Notes, reduce the rate or extend the time of
payment of interest thereon, reduce the principal amount thereof, or impair
the right to institute suit for the enforcement of any such payment on or
after the stated maturity thereof (or, in the case of redemption, on or after
the redemption date) without the consent of each holder of the Notes, (ii)
reduce the aforesaid percentage of any of the Notes, the consent of the
holders of which is required for any such supplemental indenture, without the
consent of the holders of all the Notes then outstanding, or (iii) modify any
of the provisions concerning modification of the Indenture except to increase
any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of each holder of
the Notes.
REPORTS TO TRUSTEE AND HOLDERS OF NOTES
The Indenture provides that the Company must provide the Trustee with copies
of the quarterly and annual reports and other information, documents and
reports specified in Sections 13, 14 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which the Company may be required to
file with the Securities and Exchange Commission (the"Commission"); or if the
Company is not required to file such information, documents or reports,
pursuant to any of such sections, then to file with the Trustee and the
Commission, such of the supplementary and periodic information, documents and
reports which may be required to be filed pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange. The Indenture also provides that the Company must provide
holders of the Notes with summaries of any such information, documents and
reports.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated the date hereof (the "Underwriting Agreement") among the Company and
Lehman Brothers Inc., Chase Securities Inc., NationsBanc Capital Markets, Inc.
and TD Securities (USA) Inc. (collectively, the "Underwriters"), the Company
has agreed to issue and sell to the Underwriters, and each of the Underwriters
has agreed to purchase from the Company, the principal amount of Notes set
forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Lehman Brothers Inc. ....................................... $150,000,001
Chase Securities Inc. ...................................... 33,333,333
NationsBanc Capital Markets, Inc. .......................... 33,333,333
TD Securities (USA) Inc. ................................... 33,333,333
------------
Total................................................... $250,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the Notes if any are purchased.
The Underwriters propose initially to offer the Notes directly to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement, and to certain dealers at such price less a concession not in
excess of 0.25% of the principal amount of the Notes. The Underwriters may
allow, and dealers may reallow, a concession not in excess of 0.125% of the
principal amount of the Notes to certain other dealers. After the initial
public offering, the public offering price and such concessions may be changed
from time to time.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend
to make a market in the Notes as permitted by applicable laws and regulations,
but the Underwriters are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
Certain of the Underwriters have from time to time provided customary
investment banking services to the Company and expect in the future to provide
such services, for which they have received and will receive customary fees
and commissions. Chase Securities Inc. is an affiliate of The Chase Manhattan
Bank and TD Securities (USA) Inc. is an affiliate of The Toronto-Dominion
Bank. The Chase Manhattan Bank and The Toronto-Dominion Bank are each lenders
to the Company under the Company's revolving credit facilities and will each
receive its proportionate share of any repayment by the Company of amounts
outstanding under such facilities from the proceeds of the offering of the
Notes.
Until the distribution of the Notes is completed, rules of the Commission
may limit the ability of the Underwriters and certain selling group members to
bid for and purchase Notes. As an exception to these rules, the Underwriters
are permitted to engage in certain transactions that stabilize the price of
the Notes. Such transactions may consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the Notes.
If the Underwriters create a short position in the Notes in connection with
the offering (i.e., if they sell more Notes than are set forth on the cover
page of this Prospectus Supplement), the Underwriters may reduce that short
position by purchasing Notes in the open market.
The Underwriters also may impose a penalty bid on certain Underwriters and
selling group members. This means that if the Underwriters purchase Notes in
the open market to reduce the Underwriters' short position or to stabilize the
price of the Notes, they may reclaim the amount of the selling concession from
the Underwriters and selling group members who sold those Notes as part of the
offering.
S-12
<PAGE>
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might be in the absence of such purchases. The imposition of a
penalty bid might have an effect on the price of a security to the extent that
it were to discourage resales of the security by purchasers in the offering.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the Notes. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company acquired a number of cable television systems during 1996. The
historical financial statements of the significant acquired businesses filed
by the Company with the Commission pursuant to the requirements of the
Exchange Act are hereby incorporated by reference into this Prospectus
Supplement from the Company's Current Reports on Form 8-K filed on May 14,
1996 and June 26, 1996.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by Elizabeth
M. Steele, Vice President/General Counsel of the Company. Certain legal
matters will be passed upon for the Underwriters by Simpson Thacher & Bartlett
(a partnership that includes professional corporations), New York, New York.
EXPERTS
The consolidated financial statements and related schedules of the Company
and its subsidiaries included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996, which are incorporated herein by
reference, have been audited by Arthur Andersen LLP, independent certified
public accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference upon the authority of said firm as experts in
giving said report. The historical financial statements filed by the Company
with Current Reports on Form 8-K filed on May 14, 1996 and June 26, 1996,
which are incorporated herein by reference, have been audited by Ernst & Young
LLP, independent auditors, as indicated in their reports with respect thereto,
and are incorporated herein by reference in reliance upon such reports given
upon the authority of said firm as experts in accounting and auditing.
QUALIFICATION OF FORWARD-LOOKING STATEMENTS
Certain information contained in this Prospectus Supplement, in the
Prospectus dated November 27, 1995 and in the documents incorporated by
reference into the Prospectus contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical facts, included in such
documents that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including
such matters as changes in the cable television industry, the Company's
acquisition and clustering strategies, capital expenditures, the Company's
operating strategies, the liquidation of the Company's managed partnerships,
the development of new services and technologies, particularly those in the
telecommunications area, the effects of competition, the Company's expansion
and growth of the Company's operations and other such matters, are forward-
looking statements. These forward-looking statements are based upon certain
assumptions and are subject to a number of risks and uncertainties. Actual
results could differ materially from the results predicted by these forward-
looking statements.
S-13
<PAGE>
PROSPECTUS
[LOGO OF JONES INTERCABLE, INC. APPEARS HERE]
SENIOR DEBT SECURITIES, SENIOR SUBORDINATED DEBT SECURITIES,
SUBORDINATED DEBT SECURITIES AND CLASS A COMMON STOCK
----------------
Jones Intercable, Inc. (the "Company") may offer from time to time (i)
debentures, notes and/or other unsecured evidences of indebtedness consisting
of senior debt securities ("Senior Debt Securities"), senior subordinated debt
securities ("Senior Subordinated Debt Securities") and subordinated debt
securities ("Subordinated Debt Securities") in one or more series
(collectively, the "Debt Securities") or (ii) shares of its Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), or any
combination of the foregoing, having an aggregate initial public offering
price not to exceed U.S. $600,000,000 or the equivalent thereof in one or more
foreign currencies at prices and on terms to be determined at or prior to the
time of sale. The Debt Securities may be issued as convertible Debt Securities
convertible into shares of the Class A Common Stock or into other securities.
The Debt Securities and the Class A Common Stock are collectively referred to
as the "Securities."
Specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in an accompanying prospectus supplement (a
"Prospectus Supplement"), together with the terms of the offering of the
Securities, the initial offering price and the net proceeds to the Company
from the sale thereof. The Prospectus Supplement will set forth, among other
matters, the following with respect to the particular Securities: (i) in the
case of Debt Securities, the specific designation, aggregate principal amount,
ranking as senior debt, senior subordinated debt or subordinated debt,
authorized denominations, maturity, rate or method of calculation of interest
and dates for payment thereof, any conversion, redemption, prepayment or
sinking fund provisions, and the currency, currencies or currency units in
which principal, premium, if any, or interest, if any, is payable and (ii) in
the case of the Class A Common Stock, the number of shares and the terms of
the offering and sale thereof. The Prospectus Supplement will also contain
information, as applicable, about certain United States federal income tax
considerations relating to the Securities in respect of which this Prospectus
is being delivered.
The Company's Class A Common Stock is traded in the over-the-counter market
and is authorized for quotation on the National Market System operated by the
National Association of Securities Dealers, Inc. under the symbol JOINA. Any
Class A Common Stock offered will be listed, subject to notice of issuance, on
such exchange. See "Price Range of Class A Common Stock."
The Company may sell Securities directly to purchasers or through agents or
dealers designated from time to time by the Company or to or through
underwriters. If any agents, dealers or underwriters are involved in the sales
of Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions
or discounts will be set forth in the accompanying Prospectus Supplement. The
net proceeds to the Company from the sale of the Securities will be set forth
in the Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is November 27, 1995.
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY AGENT,
DEALER OR UNDERWRITER. THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR ANY
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (herein, together with all
amendments and exhibits, referred to as the "Registration Statement") relating
to the Securities under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information pertaining to the Securities and the Company, reference is made to
the Registration Statement.
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and
at the following Regional Offices of the Commission: 7 World Trade Center,
Suite 1300, New York, New York 10048, and Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of any such
material may be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company will furnish to holders of the Securities annual reports
containing audited financial statements accompanied by a report thereon by the
Company's independent certified public accountants.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been filed by the Company with the
Commission (File No. 1-9953) pursuant to the requirements of the Exchange Act,
are hereby incorporated by reference: (i) the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1995, as amended, (ii) the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 1995,
(iii) the Company's Current Report on Form 8-K dated September 8, 1995, (iv)
the Company's Current Report on Form 8-K dated September 27, 1995, (v) the
Company's Current Report on Form 8-K dated October 10, 1995, (vi) the
Company's Current Report on Form 8-K dated November 1, 1995, (vii) the
Company's Current Report on Form 8-K dated November 10, 1995 and (viii) the
Company's Proxy Statement dated May 19, 1995.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the date any such document is filed. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein or in any Prospectus Supplement shall be deemed to be
modified or superseded for purposes of the Registration Statement and this
Prospectus or any Prospectus Supplement to the extent that a statement
contained herein or therein (or in any other subsequently filed document which
also is, or is deemed to be, incorporated by reference herein or therein)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement and this Prospectus or any
Prospectus Supplement.
2
<PAGE>
The Company will provide without charge to each person to whom a Prospectus
is delivered, upon written or oral request of such persons, a copy of any or
all of the documents that are incorporated by reference herein, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such document). Requests should be directed to Elizabeth M.
Steele, Vice President/General Counsel and Secretary, Jones Intercable, Inc.,
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80133-3309, (303)
792-3111.
THE COMPANY
The Company is a Colorado corporation organized in 1970. The Company is
primarily engaged in the cable television business. The Company also holds
equity interests in a number of programming and other cable-related
subsidiaries. At May 31, 1995, the Company had a total of approximately 3,480
employees. The executive offices of the Company are located at 9697 East
Mineral Avenue, Englewood, Colorado 80112, and its telephone number is (303)
792-3111.
The Company develops and operates cable television systems for itself and
for its managed limited partnerships. Based on the number of basic subscribers
served by the Company's owned and managed cable television systems, the
Company is one of the largest cable television operators in the United States.
As of May 31, 1995, the Company owned or managed 55 cable television systems
serving a total of approximately 1,350,000 basic subscribers in 23 states.
Glenn R. Jones, the founder, Chairman, Chief Executive Officer and major
shareholder of the Company, is one of the pioneers in the cable television
industry, and he has been involved in the ownership and operation of cable
television systems since 1970.
The Company has grown by acquiring and developing cable television systems
for both itself and its managed partnerships, primarily in suburban areas with
attractive demographic characteristics. One of the primary factors utilized by
the Company in deciding to acquire a particular cable television system is the
potential of the system for operating cash flow growth and value appreciation.
Key elements of the Company's operating strategy include increasing basic
penetration levels and revenue per subscriber through targeted marketing,
superior customer service and maintenance of high technical standards. The
Company has deployed fiber optic cable wherever practical in its current
rebuild and upgrade projects, which improves system reliability and picture
quality, increases channel capacity and provides the potential for new
business opportunities. The Company has focused on pay-per-view and
advertising as revenue growth opportunities, and expects to continue to do so
in the future.
Within the past several years, and at an increasing pace recently, the cable
television industry has seen much change. With recent announcements of
alliances between cable television companies and telephone, computer and
software companies, the Company believes that the nature of the cable
television business is changing from the traditional coaxial network
delivering video entertainment to a more sophisticated, digital platform
environment where cable systems could be capable of delivering traditional
programming as well as other services, including data, telephone and expanded
educational and entertainment services on an interactive basis. As this
convergence of various technologies progresses, cable television companies
will have to reevaluate their system architecture, upgrade their cable plants
to take advantage of new opportunities and consider clustering their systems
in geographic areas where they can achieve economies of scale and reasonable
returns on the investments made. The Company is, on an on-going basis,
evaluating its position in this changing marketplace and intends, where
possible, to pursue these opportunities as they evolve. The ability of the
Company to do so, however, will be dependent in large part on the availability
of debt and equity financing.
The Company intends to grow by implementing a balanced strategy directed at
acquiring cable television systems from Company-managed limited partnerships
and from third parties. As part of this process, certain systems owned by the
Company and its managed partnerships may be sold to third parties and/or such
systems may be exchanged for systems owned by other cable system operators. It
is the Company's plan to
3
<PAGE>
cluster its cable television properties, to the extent feasible, in geographic
areas where it will have an adequate number of subscribers to justify the
capital expenditures required to upgrade its plant and the possible offering
of telephony and other telecommunications services. The Company also intends
to maintain and enhance the value of its current cable television systems
through capital expenditures. Such expenditures will include, among others,
cable television plant extensions and the upgrade and rebuild of certain
systems. Acquisitions and capital expenditures are subject to the availability
of cash generated from operations and debt and equity financing. The capital
resources to accomplish these strategies are expected to be provided, in part,
by the net proceeds to the Company from the sale of the Securities.
Glenn R. Jones, the Chairman of the Board of Directors and Chief Executive
Officer of the Company, is deemed to be the beneficial owner of all of the
shares of Class A Common Stock and Common Stock of the Company owned by him
and by Jones International, Ltd., a private company owned 100 percent by Mr.
Jones, and certain of their affiliates. Mr. Jones' direct and indirect stock
ownership in the Company enables him to control the election of a majority of
the Company's Board of Directors and gives him voting power over approximately
41 percent of votes to be cast by all shareholders of the Company on matters
not requiring a class vote. See "Description of Capital Stock."
In December 1994, Bell Canada International Inc. ("BCI"), which has an
approximate 30 percent economic interest in the Company through its indirect
ownership of approximately 38 percent of the Class A Common Stock of the
Company, acquired from Mr. Jones and Jones International, Ltd. and certain of
their affiliates options to purchase all of the shares of the Company's Common
Stock owned by Mr. Jones, Jones International, Ltd. and certain of their
affiliates. These options, if and when exercised, would enable BCI to control
the election of a majority of the Company's Board of Directors. BCI, through
its parent company, BCE Inc., and their affiliates, is engaged in many areas
of the telecommunications business. BCE Inc. is the largest telecommunications
company in Canada and it also is the parent company of Bell Canada, the
largest provider of telecommunications services in Canada. BCI is also
affiliated with Bell Northern Research, Canada's largest research and
development organization, and with Northern Telecom, a leading global
manufacturer of telecommunications equipment. BCI and the Company also are
principal shareholders of Bell Cablemedia plc, which is one of the largest
cable communications companies providing multi-channel television and
telephony services in the United Kingdom.
RECENT DEVELOPMENTS
As part of its strategy of geographically clustering its cable television
systems, the Company has announced several acquisitions of cable television
systems from its managed partnerships and from unaffiliated parties and the
exchange of cable television systems owned or to be acquired by the Company
for cable television systems currently owned by unaffiliated parties. These
acquisitions and exchanges are scheduled to close during the autumn of 1995 or
in the first half of 1996. It is anticipated that the Company will acquire and
hold these cable television systems through a wholly owned subsidiary, Jones
Cable Holdings, Inc. These transactions will increase the Company's basic
subscriber base to approximately 560,000, an increase of approximately
247,000. Funding for these transactions is expected to come from cash on hand,
cash generated from operations and borrowings under the Company's credit
facility, which currently is being renegotiated to have Jones Cable Holdings,
Inc. act as the borrower and to increase the maximum amount available from
$300,000,000 to $500,000,000.
In October 1995, the Company purchased from a managed partnership the cable
television system serving areas in and around Augusta, Georgia (the "Augusta
System") for a purchase price of $142,618,000, subject to normal closing
adjustments. The Augusta System serves approximately 67,000 basic subscribers
and passes approximately 102,000 homes. The Augusta System is contiguous with
the cable television system already owned by the Company serving areas in and
around North Augusta, South Carolina (the "North Augusta System"). Together,
the Augusta System and the North Augusta System form an operating cluster that
will serve approximately 81,700 basic subscribers and pass approximately
125,700 homes.
The Company has agreed to purchase from an unaffiliated party the cable
television systems serving areas in and around Dale City, Lake Ridge,
Woodbridge, Fort Belvoir, Triangle, Dumfries, Quatico, Accoquan
4
<PAGE>
and portions of Prince William County, all in the State of Virginia (the "Dale
City System") for a purchase price of $123,000,000, subject to normal closing
adjustments. These systems serve approximately 50,000 basic subscribers and
pass approximately 64,100 homes. The Company also has agreed to purchase from
unaffiliated companies the cable television systems serving areas in and
around Manassas, Manassas Park, Haymarket and portions of Prince William
County, all in the State of Virginia (the "Manassas System") for a purchase
price of $71,100,000, subject to normal closing adjustments. These systems
serve approximately 26,000 basic subscribers and pass approximately 39,000
homes.
The Company has also agreed to purchase three cable television systems from
various of its managed partnerships and to exchange those systems for cable
television systems currently owned by an unaffiliated party. The Company has
agreed to purchase from a managed partnership the cable television system
serving areas in and around Carmel, Indiana (the "Carmel System") for a
purchase price of $44,235,333, subject to normal closing adjustments. The
Carmel System serves approximately 18,500 basic subscribers and passes
approximately 24,400 homes. The Company has agreed to purchase from a managed
partnership the cable television system serving areas in and around
Orangeburg, South Carolina (the "Orangeburg System") for a purchase price of
$18,347,667, subject to normal closing adjustments. The Orangeburg System
serves approximately 12,000 basic subscribers and passes approximately 16,530
homes. The Company has agreed to purchase from a venture comprised of three
managed partnerships the cable television system serving areas in and around
Tampa, Florida (the "Tampa System") for a purchase price of $110,395,667,
subject to normal closing adjustments. The Tampa System serves approximately
62,500 basic subscribers and passes approximately 125,000 homes. The Company
has also entered into an asset exchange agreement with an unaffiliated cable
television system operator pursuant to which the Company will convey to that
operator substantially all of the assets of the Carmel System, the Orangeburg
System and the Tampa System and cash in the amount of $3,500,000, subject to
normal closing adjustments. In return, the Company will receive substantially
all of the assets of cable television systems serving Andrews Air Force Base,
Capitol Heights, Cheltenham, District Heights, Fairmont Heights, Forest
Heights, Morningside, Seat Pleasant, Upper Marlboro, and portions of Prince
George's County, Maryland (the "Prince George's County System") and a portion
of Fairfax County, Virginia (the "Reston System"). The Prince George's County
System and the Reston System serve approximately 85,000 subscribers.
The Prince George's County System is contiguous to the Company's Alexandria,
Virginia, Calvert County, Maryland and Charles County, Maryland cable
television systems. The Reston System is approximately 12 miles from the
Company's Alexandria, Virginia system. Acquisition of the Prince George's
County System and the Reston System together with the acquisitions of the Dale
City System and the Manassas System discussed above, will, together with cable
television systems already owned or managed by the Company in the area, bring
the total number of basic subscribers owned or managed by the Company in the
Baltimore/Washington, D.C. metropolitan area to approximately 300,000.
The Company has also agreed to purchase four cable television systems from
various of its managed partnerships and to exchange those systems together
with two systems already owned by the Company for cable television systems
currently owned by an unaffiliated party. The Company has agreed to purchase
from a venture comprised of four managed partnerships the cable television
system serving the City of Manitowoc, Wisconsin (the "Manitowoc System") for a
purchase price of $15,735,667, subject to normal closing adjustments. The
Company, as general partner of the partnerships that form the venture, will
receive a distribution of approximately $3,900,000 upon the closing of this
transaction. The Manitowoc System serves approximately 10,500 basic
subscribers and passes approximately 15,400 homes. The Company's acquisition
of the Manitowoc System is subject to the approval of the holders of a
majority of the limited partnership interests of each of the four constituent
partnerships of the venture that owns the Manitowoc System. The Company has
agreed to purchase from a managed partnership the cable television systems
serving areas in and around Lodi, Ohio (the "Lodi System") for a purchase
price of $25,706,000, subject to normal closing adjustments. The Lodi System
serves approximately 14,700 basic subscribers and passes approximately 20,600
homes. The Company has agreed to purchase from a managed partnership the cable
television system serving areas in and around Ripon, Wisconsin (the "Ripon
System") for a purchase price of $3,712,667, subject to normal closing
adjustments. The Ripon System serves approximately 2,450 basic subscribers and
passes approximately 2,500 homes. The Company has agreed to purchase from a
managed partnership the cable television system serving areas in and
5
<PAGE>
around Lake Geneva, Wisconsin (the "Lake Geneva System") for a purchase price
of $6,345,667, subject to normal closing adjustments. The Lake Geneva System
serves approximately 3,400 basic subscribers and passes approximately 5,400
homes. The Company has also entered into an asset exchange agreement with an
unaffiliated cable television system operator pursuant to which the Company
will convey to that operator substantially all of the assets of the Manitowoc
System, the Lodi System, the Ripon System, the Lake Geneva System and the
cable television systems serving areas in and around Kenosha, Wisconsin (the
"Kenosha System") and Hilo, Hawaii (the "Hilo System") currently owned by the
Company. The Hilo System serves approximately 17,000 basic subscribers and
passes approximately 23,000 homes. The Kenosha System serves approximately
27,000 basic subscribers and passes approximately 39,000 homes. In return, the
Company will receive substantially all of the assets of the cable television
system serving areas in and around Savannah, Georgia (the "Savannah System")
and $4,000,000 in cash, subject to normal closing adjustments. The Savannah
System serves approximately 63,000 subscribers and passes approximately
100,000 homes.
In October 1995, Cable TV Fund 11-B, Ltd., one of the Company's managed
partnerships, entered into an agreement with an unaffiliated party to sell its
cable television system serving areas in and around Lancaster, New York (the
"Lancaster System") for a sales price of $84,000,000 in cash, subject to
normal closing adjustments. The Lancaster System serves approximately 38,000
basic subscribers and passes approximately 57,000 homes. The Company, as
general partner of the partnership, will receive a distribution of
approximately $14,262,000 upon the closing of the sale of the Lancaster
System. The closing of this transaction is subject to the approval of the sale
by the holders of a majority of the limited partnership interests of Cable TV
Fund 11-B, Ltd. and is expected to occur during the first half of 1996.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED MAY 31, THREE MONTHS
--------------------------------------------- ENDED AUGUST 31,
1991 1992 1993 1994 1995 1995
-------- ------- -------- -------- ------- ----------------
DOLLARS IN THOUSANDS, EXCEPT RATIOS
<S> <C> <C> <C> <C> <C> <C>
Pre-tax Income (Loss)... $(45,030) $23,383 $(40,266) $(25,277) $(4,001) $(6,420)
Adjustments:
Interest expense...... 44,699 38,129 43,573 36,189 39,939 13,368
Interest charged to
cable
television systems
held
for resale............ (4,598) -- -- -- -- --
Equity in losses of
limited partnerships... 11,233 8,158 2,900 4,624 2,981 923
-------- ------- -------- -------- ------- -------
$ 6,304 $69,670 $ 6,207 $ 15,536 $38,919 $ 7,871
Interest Expense (net).. $ 40,101 $38,129 43,573 36,189 39,939 13,368
-------- ------- -------- -------- ------- -------
Ratio of Earnings to
Fixed Charges(1)....... -- 1.83x -- -- -- --
Coverage deficiency..... $(33,797) $ -- $(37,366) $(20,653) $(1,020) $(5,497)
======== ======= ======== ======== ======= =======
</TABLE>
- --------
(1) The ratio of earnings to fixed charges has been computed by dividing the
sum of (a) pre-tax income, including equity in losses of limited
partnerships, and (b) interest expense net of interest charged to cable
television systems held for resale, by net interest expense.
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement relating to a
specific offering of Securities, the net proceeds from the sale of the
Securities will be added to the general funds of the Company and will be used
for general corporate purposes, which may include acquisitions of cable
television systems from managed partnerships and/or from unaffiliated parties,
refinancings of indebtedness, working capital, capital expenditures, and
repurchases and redemptions of securities.
6
<PAGE>
CONCURRENT OFFERING
The Company has filed a registration statement under the Securities Act for
the offering, from time to time, of 2,844,678 shares of its Class A Common
Stock held by various affiliates of the Company. Although this registration
statement has not yet been declared effective, the Company anticipates that it
will be declared effective concurrently with or shortly before or after the
effectiveness of the Registration Statement filed in respect to the offering
made by this Prospectus and that sales of the Class A Common Stock of the
Company by such affiliates may be made from time to time concurrently with the
offering made by this Prospectus. The Company will receive none of the proceeds
of this concurrent offering. The Company also may file additional registration
statements to offer equity or debt securities during the effectiveness of the
Registration Statement filed in connection with the offering made by this
Prospectus.
DIVIDEND POLICY
The Company has never paid a cash dividend with respect to its shares of
Common Stock or Class A Common Stock, and it has no present intention to pay
cash dividends in the foreseeable future. The current policy of the Company's
Board of Directors is to retain earnings to provide funds for the operation and
expansion of its business. Future dividends, if any, will be determined by the
Board of Directors in light of the circumstances then existing, including the
Company's earnings and financial requirements and general business conditions.
If cash dividends are paid in the future, the holders of the Class A Common
Stock will be paid $.005 per share per quarter in addition to the amount
payable per share of Common Stock. Such additional dividends on the Class A
Common Stock are not cumulative but would be adjusted appropriately if cash
dividends are declared with respect to a period other than a quarterly period.
The Company's credit agreements restrict the right of the Company to declare
and pay cash dividends without the consent of the lenders.
PRICE RANGE OF CLASS A COMMON STOCK
The Company's Class A Common Stock is traded in the over-the-counter market
and is authorized for quotation on the National Market System of the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") under
the symbol JOINA. Any shares of Class A Common Stock offered by this Prospectus
will be listed, subject to notice of issuance, on such exchange. The following
table sets forth for the first quarterly period of fiscal 1996 and for each
quarterly period of fiscal 1995 and 1994 the high and low reported closing
prices of the Company's Class A Common Stock as reported by NASDAQ.
<TABLE>
<CAPTION>
PERIOD HIGH LOW
------ ------ -------
<C> <S> <C> <C>
1996 First Quarter........................................ 15 1/2 13 3/8
<CAPTION>
PERIOD HIGH LOW
------ ------ -------
<C> <S> <C> <C>
1995 First Quarter........................................ 15 3/8 12
Second Quarter....................................... 15 3/8 13 5/16
Third Quarter........................................ 16 1/4 11 3/8
Fourth Quarter....................................... 17 1/2 13 1/4
<CAPTION>
PERIOD HIGH LOW
------ ------ -------
<C> <S> <C> <C>
1994 First Quarter........................................ 15 1/4 11 1/4
Second Quarter....................................... 19 12 1/2
Third Quarter........................................ 20 1/4 15
Fourth Quarter....................................... 15 5/8 11
</TABLE>
If shares of the Company's Class A Common Stock are being offered, a recent
last sale price of the Class A Common Stock will be set forth on the cover page
of the Prospectus Supplement.
The Company's Common Stock also is traded in the over-the-counter market and
is quoted on the National Market System of NASDAQ under the symbol JOIN.
7
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 5,550,000 shares of
Common Stock, $.01 par value per share, of which 5,113,021 shares were
outstanding at August 1, 1995, and 60,000,000 shares of Class A Common Stock,
$.01 par value per share, of which 26,158,305 shares were outstanding at such
date.
The outstanding shares of both classes of common stock are not subject to
redemption or to any liability for further calls or assessments, and the
holders of such shares do not have pre-emptive or other rights to subscribe
for additional shares of the Company. All issued and outstanding shares of
Common Stock and Class A Common Stock are validly issued, fully paid and
nonassessable. Dividends in cash, property or shares of the Company may be
paid upon the Common Stock and Class A Common Stock, if declared by the
Company's Board of Directors out of any funds legally available therefor, and
holders of Class A Common Stock have a cash dividend preference over holders
of Common Stock, as described below. Holders of Common Stock and Class A
Common Stock are entitled to share ratably in assets available for
distribution upon any liquidation of the Company, subject to the prior rights
of creditors, although holders of Class A Common Stock have a preference on
liquidation over holders of Common Stock, as described below.
The Class A Common Stock has certain preferential rights with respect to
cash dividends and upon liquidation of the Company. In the event that cash
dividends are paid, the holders of the Class A Common Stock will be paid $.005
per share per quarter in addition to the amount payable per share of Common
Stock. In the case of liquidation, holders of Class A Common Stock will be
entitled to a preference of $1 per share. After such amount is paid, holders
of the Common Stock will then be entitled to receive $1 per share for each
share of Common Stock outstanding. Any remaining amount will be distributed to
the holders of Class A Common Stock and Common Stock on a pro rata basis.
The Class A Common Stock has voting rights that are generally 1/10th of
those held by the Common Stock. In the election of directors, the holders of
Class A Common Stock, voting as a separate class, are entitled to elect that
number of directors that constitute 25 percent of the total membership of the
Board of Directors. Holders of the Common Stock, also voting as a separate
class, are entitled to elect the remaining directors.
As of October 15, 1995, the outstanding shares of Class A Common Stock
constituted approximately 84 percent of the total outstanding shares of
capital stock of the Company but cast only 34 percent of the votes to be cast
in matters to be acted upon by shareholders of the Company not requiring a
class vote, and the outstanding shares of the Company's Common Stock
constituted approximately 16 percent of the outstanding capital stock of the
Company, but cast approximately 66 percent of the votes to be cast by
shareholders of the Company in connection with such matters.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and any variations from such general terms and provisions applicable to the
Debt Securities so offered will be described in the Prospectus Supplement
relating to such Debt Securities.
The Debt Securities will be general unsecured obligations of the Company.
The Senior Debt Securities will be senior to all subordinated indebtedness of
the Company, including any Senior Subordinated Debt Securities and
Subordinated Debt Securities and pari passu with other senior unsecured
indebtedness of the Company. The Senior Subordinated Debt Securities will be
subordinate in right of payment to any Senior Debt Securities and to certain
other debt obligations of the Company that may be outstanding from time to
time, pari passu with certain other senior subordinated indebtedness of the
Company that may be outstanding from time to time and senior to
8
<PAGE>
certain subordinated indebtedness of the Company that may be outstanding from
time to time, including any Subordinated Debt Securities. The Subordinated
Debt Securities will be subordinate in right of payment to any Senior Debt
Securities and Senior Subordinated Debt Securities and to certain other debt
obligations of the Company that may be outstanding from time to time and pari
passu with certain other subordinated indebtedness of the Company that may be
outstanding from time to time.
The particular terms of each series of Debt Securities offered by a
particular Prospectus Supplement will be described therein. Senior Debt
Securities, Senior Subordinated Debt Securities and Subordinated Debt
Securities will each be issued under a separate indenture (individually an
"Indenture" and collectively the "Indentures") to be entered into prior to the
issuance of such Debt Securities. The Indentures will be substantially
identical except for provisions relating to subordination. There may be a
separate trustee (individually a "Trustee" and collectively the "Trustees")
under each Indenture. It is anticipated that the Senior Debt Securities will
be issued under an Indenture to be executed by the Company and U.S. Trust
Company of California, N.A., as Trustee (the "Senior Indenture"). It is
anticipated that the Senior Subordinated Debt Securities will be issued under
an Indenture to be executed by the Company and First Trust National
Association, as Trustee (the "Senior Subordinated Indenture"). It is
anticipated that the Subordinated Debt Securities will be issued under an
Indenture to be executed by the Company and Bank of America National Trust and
Savings Association, as Trustee (the "Subordinated Indenture"). Specific
information regarding a Trustee under an Indenture will be included in any
Prospectus Supplement relating to the Debt Securities issued thereunder.
The following discussion includes a summary description of all material
terms of the Indentures, other than terms that are specific to a particular
series of Debt Securities and which will be described in the Prospectus
Supplement relating to such series. The following summaries do not purport to
be complete and are subject, and are qualified in their entirety by reference
to, all of the provisions of the Indentures, including the definitions therein
of certain terms capitalized in this Prospectus. Wherever particular sections
or articles or defined terms of the Indentures are referred to herein or in a
Prospectus Supplement, such sections or articles or defined terms are
incorporated herein or therein by reference.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described in such
Prospectus Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indentures will not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness which may be issued thereunder and
Debt Securities may be issued thereunder in one or more series, in such form
or forms, with such terms and up to the aggregate principal amount authorized
from time to time by the Company.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities: (1) the designation (including whether they are Senior
Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt
Securities, whether such Debt Securities are convertible and, if convertible,
into what securities the Debt Securities are convertible), aggregate principal
amount and authorized denominations of the Debt Securities; (2) the percentage
of their principal amount at which such Debt Securities will be issued; (3)
the date or dates on which the Debt Securities will mature or the method of
determination thereof; (4) the rate or rates (which may be fixed or variable)
at which the Debt Securities will bear interest, if any, or the method by
which such rate or rates shall be determined, reset features of the rates, if
any, and the date or dates from which such interest will accrue or the method
by which such date or dates shall be determined; (5) the dates on which any
such interest will be payable and the regular record dates for such interest
payment dates; (6) any mandatory or optional sinking fund or purchase fund or
analogous provisions; (7) if applicable, the date after which and the price or
prices at which the Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed at the option of the Company or of the
holder thereof and the other detailed terms and provisions of such optional or
mandatory redemption; (8) if applicable, the terms and conditions upon which
the Debt
9
<PAGE>
Securities may be convertible or exchangeable into or exercisable for other
securities (including shares of a class of capital stock of the Company or any
other issuer), including the initial conversion rate, the conversion period
and any other provision in addition to or in lieu of those described herein;
(9) whether such Debt Securities shall be subject to defeasance and, if so,
the terms thereof; (10) any Events of Default provided with respect to the
Debt Securities that are in addition to or different from those described
herein; and (11) any other terms of the Debt Securities.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of (and premium, if any) and interest on the Debt Securities
will be payable, and the Debt Securities will be exchangeable and transfers
thereof will be registrable, at the Corporate Trust Office of the Trustee,
provided that at the option of the Company, payment of any interest may be
made by check mailed to the address of the person entitled thereto as it
appears in the Security Register.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any registration of transfer or exchange of
the Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Debt Securities may be issued under the Indenture as original issue discount
securities to be offered and sold at a discount from the principal amount
thereof. Special federal income tax, accounting and other considerations
applicable to any such original issue discount securities will be described in
the Prospectus Supplement relating thereto.
Unless otherwise indicated in the Prospectus Supplement relating to a
particular series of Debt Securities, the covenants applicable to the Debt
Securities would not necessarily afford holders protection in the event of a
highly leveraged or other transaction involving the Company or in the event of
a material adverse change in the Company's financial condition or results of
operation. Unless otherwise indicated in the Prospectus Supplement relating to
a particular series of Debt Securities, the Debt Securities do not contain any
other provisions that are designed to afford protection in the event of a
highly leveraged transaction involving the Company.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest on the
Subordinated Debt Securities is expressly subordinated, to the extent and in
the manner set forth in any Prospectus Supplement and the Subordinated
Indenture, in right of payment to the prior payment in full of all present and
future Senior Indebtedness (including any Senior Debt Securities and Senior
Subordinated Debt Securities then outstanding) of the Company. Senior
Indebtedness is defined in the Subordinated Indenture as: (1) any indebtedness
of the Company (i) for borrowed money or (ii) evidenced by a note, debenture
or similar instrument (including obligations incurred under leases which are
or may be capitalized under generally accepted accounting principles and
purchase money obligations) given in connection with the acquisition of any
property or assets, including the purchase of cable television systems and
securities, (2) any indebtedness of others described in the preceding clause
(1) for which the Company is responsible or liable as guarantor or otherwise,
(3) any indebtedness now outstanding or hereafter incurred by the Company in
connection with an acquisition by the Company or a subsidiary of the stock or
substantially all of the assets of another person or a merger or consolidation
to which the Company or a subsidiary is a party, for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise, and (4)
all deferrals, renewals, extensions and refundings of any such indebtedness or
obligations, other than (a) indebtedness as to which, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that such indebtedness is subordinate in right of payment to
all other indebtedness of the Company or is not superior in right of payment
to the Subordinated Debt Securities or to other indebtedness which is pari
passu with or subordinate to the Subordinated Debt Securities, and (b)
10
<PAGE>
indebtedness of the Company to a subsidiary for money borrowed or advanced.
The Company has outstanding the 11.5 percent Senior Subordinated Debentures
due 2004, the 10.5 percent Senior Subordinated Debentures due 2008 and the 9
5/8 percent Senior Notes due 2002, only the latter of which constitutes Senior
Indebtedness. At August 31, 1995, approximately $219,261,000 of Senior
Indebtedness was outstanding.
Borrowings of the Company from commercial banks historically also have
constituted Senior Indebtedness. At August 31, 1995, and as of the date of
this Prospectus, no borrowings were outstanding under the Company's
$300,000,000 secured revolving credit facility. The Company currently is
renegotiating its credit arrangements with commercial banks that are intended
to result in the transfer of certain of the Company's cable television system
assets to Jones Cable Holdings, Inc., a wholly owned subsidiary of the
Company. It is intended that the subsidiary would then enter into a new
$500,000,000 unsecured revolving credit facility, the borrowings under which
would not constitute Senior Indebtedness. While the Debt Securities will not
technically be subordinate to the indebtedness incurred by Jones Cable
Holdings, Inc. or any other subsidiary of the Company, the Company's cable
television assets that belong to Jones Cable Holdings, Inc. will no longer be
owned directly by the Company and will not be available to satisfy claims of
the holders of the Debt Securities.
The payment of the principal of (and premium, if any) and interest on the
Senior Subordinated Debt Securities is expressly subordinated, to the extent
and in the manner set forth in any Prospectus Supplement and the Senior
Subordinated Indenture, in right of payment to the prior payment in full of
all present and future Senior Indebtedness (including any Senior Debt
Securities then outstanding) of the Company. Senior Indebtedness is defined in
the Senior Subordinated Indenture as set forth in clauses (1), (2), (3) and
(4) above from the Subordinated Indenture; provided, however, that it excludes
only indebtedness that is subordinate in right of payment to any other
indebtedness of the Company and indebtedness of the Company to a subsidiary
for money borrowed or advanced. The Senior Subordinated Debt Securities will
rank senior to the Company's outstanding issues of subordinated indebtedness.
The extent to which the Company may incur Senior Indebtedness and
limitations thereon, if any, are set forth in the accompanying Prospectus
Supplement. If Debt Securities are being offered, the aggregate principal
amount of Senior Indebtedness outstanding as of a recent date will be set
forth in the accompanying Prospectus Supplement.
Upon any payment or distribution of assets of the Company to creditors upon
any dissolution, winding up, total or partial liquidation or reorganization,
whether voluntary or involuntary, or in bankruptcy, insolvency or receivership
or upon an assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of the Company or otherwise, all principal of,
premium, if any, and interest due on all Senior Indebtedness (including any
outstanding Senior Debt Securities) must be paid in full before the holders of
the Senior Subordinated Debt Securities or the Subordinated Debt Securities
are entitled to receive or retain any payment thereon, and principal of,
premium, if any, and interest on the Senior Subordinated Securities must be
paid in full before the holders of the Subordinated Debt Securities are
entitled to receive or retain any payment thereon. Subject to the payment in
full of all Senior Indebtedness, the holders of the Senior Subordinated Debt
Securities or the Subordinated Debt Securities will be subrogated to the
rights of the holders of Senior Indebtedness (as respectively defined in the
Senior Subordinated Indenture and the Subordinated Indenture) to receive
payments or distributions of assets of the Company applicable to Senior
Indebtedness until the Senior Subordinated Debt Securities or Subordinated
Debt Securities are paid in full.
CONVERSION RIGHTS
The terms, if any, on which Debt Securities may be exchanged for or
converted (mandatorily or otherwise) into shares of Class A Common Stock of
the Company or into other securities of the Company or into shares of another
corporation will be set forth in the Prospectus Supplement relating thereto.
See "Description of Capital Stock." The Company currently holds, either
directly or through certain of its wholly owned subsidiaries, 6,225,796
American Depositary Shares ("ADSs") representing 31,128,980 Ordinary Shares of
Bell Cablemedia plc, a cable/telephony company incorporated under the laws of
England and Wales. If Debt Securities convertible into the Company's ADSs are
offered, information about Bell Cablemedia plc and the ADSs will be set forth
in the accompanying Prospectus Supplement.
11
<PAGE>
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default will be defined in the Indentures with respect to Debt
Securities of any series issued thereunder as a default in payment of
principal or premium, if any, at maturity or upon redemption; a default in
payment of interest subject to applicable grace periods; a failure by the
Company for 60 days after notice to perform any other of the covenants or
agreements in the Indentures; certain events of bankruptcy, insolvency or
reorganization of the Company or any significant subsidiary; or any other
event of default provided with respect to Debt Securities of that series.
Each Indenture will provide that, if an Event of Default shall have occurred
and be continuing, either the Trustee or the holders of 25% in principal
amount of the Debt Securities of such series then outstanding may declare the
principal of all the Debt Securities of such series to be due and payable
immediately, but upon certain conditions such declaration may be annulled and
past defaults may be waived by the holders of a majority in principal amount
of the Debt Securities of such series then outstanding. The holders of a
majority in principal amount of the Debt Securities of such series then
outstanding may also waive any default (except a default in payment of
principal or interest on the Debt Securities of such series) prior to such
declaration.
Each Indenture will require the Company to file a certificate specifying a
default immediately upon becoming aware of such default, and to file annually
with the Trustee a certificate either stating the absence of any default or
specifying any default that exists. Each Indenture will provide that the
Trustee shall, within 90 days after the occurrence of a default, give the
holders of Debt Securities of any series notice of all uncured and unwaived
defaults known to it; provided that, except in the case of default in the
payment of principal or interest on any of the Debt Securities of such series
or the making of any sinking fund payment, the Trustee will be protected in
withholding such notice if the Trustee in good faith determines that the
withholding of such notice is in the interest of such holders. The term
"default" for the purpose of this provision means the occurrence of any of the
Events of Default specified above, excluding any grace periods and
irrespective of the giving of notice.
Each Indenture will contain provisions entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care,
to be indemnified by the holders of Debt Securities of any series before
proceeding to exercise any right or power under the Indenture at the request
of such holders. Each Indenture provides that the holders of a majority in
principal amount of the Debt Securities of such series then outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, provided that the Trustee may decline to act if such direction is
contrary to law or if the Trustee determines in good faith that the proceeding
so directed would be illegal, would involve it in personal liability or would
be unduly prejudicial to other holders of Debt Securities of such series. Each
Indenture also will restrict the right of holders of Debt Securities of such
series to initiate any suit or proceeding by requiring prior written request
to the Trustee of holders of at least 25% in principal amount of the Debt
Securities of such series.
Reference is made to the Prospectus Supplement relating to any series of
Debt Securities that are original issue discount securities for the particular
provision relating to acceleration of the maturity of a portion of the
principal amount of such original issue discount securities upon the
occurrence of an Event of Default and the continuation thereof.
MERGER OR SALES OF ASSETS
Each Indenture will provide that the Company may merge with another
corporation if the Company is the surviving corporation, or may consolidate
with or merge into another corporation or sell or lease all or substantially
all of its assets to another corporation if (i) immediately after such
transaction no default or event of default under the Indenture shall have
occurred or be continuing, (ii) the resulting, surviving or transferee
corporation is organized and existing under the laws of a state of the United
States or the District of Columbia and (iii) such corporation agrees to pay
promptly when due the principal of and interest on the Debt Securities and
agrees to assume, perform and observe all the covenants and conditions of the
Indenture.
12
<PAGE>
MODIFICATION OF THE INDENTURES
The Company and the Trustee, with the consent of the holders of not less
than a majority of the aggregate principal amount of the Debt Securities of
any series affected at the time outstanding, may execute supplemental
indentures adding, changing or eliminating stated provisions of the Indentures
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Debt Securities; however, no such supplemental indenture may
(i) extend the stated maturity of any Debt Securities, reduce the rate or
extend the time of payment of interest thereon, reduce the principal amount
thereof, or impair the right to institute suit for the enforcement of any such
payment on or after the stated maturity thereof (or, in the case of
redemption, on or after the redemption date) without the consent of each
holder of the Debt Securities of such series so affected, (ii) reduce the
aforesaid percentage of any of the Debt Securities, the consent of the holders
of which is required for any such supplemental indenture, without the consent
of the holders of all the Debt Securities of such series then outstanding,
(iii) modify any of the provisions concerning modification of the Indentures
except to increase any such percentage or to provide that certain other
provisions of the Indentures cannot be modified or waived without the consent
of each holder of the Debt Securities of such series so affected, or (iv)
change the terms on which any Debt Securities are convertible or exchangeable
into or exercisable for shares of a class of capital stock of the Company or
any other issuer.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
Each Indenture may be discharged upon payment of the principal of (and
premium, if any) and interest, if any, on all the Debt Securities and all
other sums due thereunder. In addition, the Indentures will provide that if,
within one year of the date the Debt Securities of any series becomes due and
payable, or are to be called for redemption, the Company, if so permitted with
respect to Debt Securities of a particular series, deposits with the Trustee,
in trust for the benefit of the holders thereof, funds sufficient to pay all
sums due for the principal of (and premium, if any) and interest, if any, on
the Debt Securities of such series, as they shall become due or redeemable
and, if certain other conditions are met, the Trustee shall cancel and satisfy
such Indenture with respect to such series to the extent provided therein. The
Prospectus Supplement describing the Debt Securities of such series will more
fully describe the provisions, if any, relating to such cancellation and
satisfaction of the Indenture with respect to such series.
PLAN OF DISTRIBUTION
The Company may sell the Securities on a negotiated or competitive bid basis
to or through underwriters or dealers, and also may sell the Securities
directly to other purchasers or through agents. The Prospectus Supplement will
describe the method of distribution of the Securities.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If underwriters are used in the offering of the Securities, the names of the
managing underwriter or underwriters and any other underwriters, and the terms
of the transaction, including compensation of the underwriters and dealers, if
any, will be set forth in the Prospectus Supplement relating to such offering.
Only underwriters named in a Prospectus Supplement will be deemed to be
underwriters in connection with the Securities described therein. Firms not so
named will have no direct or indirect participation in the underwriting of
such Securities, although such a firm may participate in the distribution of
such Securities under circumstances entitling it to a dealer's commission. It
is anticipated that any underwriting agreement pertaining to any Securities
will (1) entitle the underwriters to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution for payment which the underwriters may be required to make in
respect thereof, (2) provide that the obligations of the underwriters will be
subject to certain conditions precedent, and (3) provide that the underwriters
generally will be obligated to purchase all the Securities if any are
purchased.
13
<PAGE>
The Company also may sell the Securities to a dealer as principal. In such
event, the dealer may then resell such Securities to the public at varying
prices to be determined by such dealer at the time of resale. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
The Securities also may be offered through agents designated by the Company
from time to time. Any such agent will be named, and the terms of any such
agency will be set forth, in the Prospectus Supplement relating thereto.
Unless otherwise indicated in such Prospectus Supplement, any such agent will
act on a best efforts basis for the period of its appointment.
Dealers and agents named in the Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Securities
described therein and, under agreements which may be entered into with the
Company, may be entitled to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution for payments which they may be required to make in respect
thereof.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
The anticipated place and time of delivery for the Securities will be set
forth in the Prospectus Supplement.
LEGAL MATTERS
The legality of the Securities offered hereby will be passed upon for the
Company by Elizabeth M. Steele, Vice President/General Counsel and Secretary
of the Company.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
included in the Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1995, which are incorporated herein by reference, have been audited by
Arthur Andersen LLP, independent certified public accountants, as indicated in
their report with respect thereto, and are incorporated herein by reference
upon the authority of said firm as experts in giving said reports.
14
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company................................................................ S-2
The Offering .............................................................. S-2
Recent Developments........................................................ S-3
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-4
Selected Financial Data.................................................... S-5
Description of the Notes................................................... S-6
Underwriting............................................................... S-12
Incorporation of Certain Information by Reference.......................... S-13
Legal Matters.............................................................. S-13
Experts.................................................................... S-13
Qualification of Forward-Looking Statements................................ S-13
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
The Company................................................................ 3
Recent Developments........................................................ 4
Ratio of Earnings to Fixed Charges......................................... 6
Use of Proceeds............................................................ 6
Concurrent Offering........................................................ 7
Dividend Policy............................................................ 7
Price Range of Class A Common Stock........................................ 7
Description of Capital Stock............................................... 8
Description of Debt Securities............................................. 8
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 14
Experts.................................................................... 14
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$250,000,000
[LOGO OF JONES INTERCABLE, INC. APPEARS HERE]
8 7/8% SENIOR NOTES
DUE 2007
---------------
PROSPECTUS SUPPLEMENT
March 18, 1997
---------------
Lehman Brothers
Chase Securities Inc.
NationsBanc Capital Markets, Inc.
TD Securities
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
