<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 1, 1997
JONES INTERCABLE, INC.
----------------------
(Exact name of registrant as specified in its charter)
Colorado 1-9953 84-0613514
-------- ------ ----------
(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- ---------------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's
telephone no.
including area code)
<PAGE>
Item 5. Other Events
------------
Jones Intercable, Inc. (the "Company") has previously reported that
(ii) its subsidiary, Jones Communications of Missouri, Inc., has agreed to
acquire the cable television system serving areas in and around Independence,
Missouri (the "Independence System") from Jones Intercable Investors, L.P., one
of the Company's managed limited partnerships, (ii) the Company has agreed to
acquire the cable television system serving areas in and around Albuquerque, New
Mexico (the "Albuquerque System") from Cable TV Fund 12-BCD Venture, a venture
comprised of three Colorado limited partnerships that are managed by the
Company, and (iii) the Company has agreed to sell the cable television system
serving areas in and around Walnut Valley, California ("the "Walnut Valley
System") to Century Communications Corp, an unaffiliated party.
Historical financial statements of the Independence System and
historical financial statements of the Albuquerque System, and pro forma
financial statements of the Company reflecting, among other things, the proposed
acquisitions of the Independence System and the Albuquerque System and the
disposition of the Walnut Valley System are being filed as Exhibits herewith.
2
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
a. Historical Financial Statements of the Albuquerque System.
Historical Financial Statements of the Independence System.
b. Pro Forma Financial Statements of Jones Intercable, Inc. reflecting (i)(a)
the purchase of the North Prince Georges County System on January 31, 1997
for $231,367,000, (b) the exchange of the Company's Colorado systems for
the Annapolis System on April 15, 1997, (c) the purchase of the Manitowoc
System on June 30, 1997 for a net purchase price of $11,556,000, (d) the
sale of 25,017,385 ordinary shares of CWC in April and May 1997, and (e)
the redemption of the 11.5% Debentures on July 15, 1997, (ii) the proposed
sale of the Walnut Valley System for $33,493,000, (iii) the proposed
purchase of the Independence System for $171,213,667, net of a $25,700,000
limited partnership distribution and a $4,280,000 brokerage fee and (iv)
the proposed purchase of the Albuquerque System for $222,963,267, net of a
general partner distribution of $8,100,000.
c. Exhibits.
2.1 Purchase and Sale Agreement (Independence) dated as of February 28,
1997 between Jones Intercable Investors, L.P. and Jones Intercable,
Inc.
2.2 Assignment and Assumption Agreement (Independence) dated as of April
15, 1997 between Jones Intercable, Inc. and Jones Communications of
Missouri, Inc.
2.3 Purchase and Sale Agreement (Albuquerque) dated as of July 28, 1997
between Jones Intercable, Inc. and Cable TV Fund 12-BCD Venture.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JONES INTERCABLE, INC.,
a Colorado corporation
Dated: August 1, 1997 By: /s/ Elizabeth M. Steele
-----------------------
Elizabeth M. Steele
Vice President, General
Counsel and Secretary
4
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
On February 28, 1997, Jones Intercable, Inc. (the "Company"), through a
wholly owned subsidiary, Jones Cable Holdings II. Inc, ("JCH II") entered
into an asset purchase agreement to acquire from Jones Intercable Investors,
L.P. (the "Partnership"), a Colorado limited partnership managed by the
Company, the cable television systems 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 closing of
the purchase of the Independence System is expected to occur in the third
quarter of 1997. The Partnership will pay The Jones Group, Ltd., a wholly
owned subsidiary of the Company, a $4,280,000 brokerage fee in connection
with this transaction.
On July 28, 1997, the Company entered into an agreement with Cable TV Fund
12-BCD Venture (the "Venture"), a managed partnership, to purchase the cable
television system serving areas in and around Albuquerque, New Mexico (the
"Albuquerque System") for $222,963,267. Upon closing, subject to amending
the Venture's current credit arrangements, the Company anticipates it will
receive, from the three partnerships that comprise the Venture, general
partner distributions totaling approximately $8,100,000. The closing of this
transaction, which is expected in the first quarter of 1998, is subject to a
number of conditions including the approval of the holders of a majority of
the limited partnership interests of each of the managed partnerships that
comprise the Venture and the consents of governmental authorities and other
third parties.
On August 16, 1996, the Company entered into an agreement with Century
Communications Corp., an unaffiliated party, to sell the Company's cable
television system serving areas in and around Walnut Valley, California ("the
"Walnut Valley System") for $33,493,000, subject to closing adjustments. The
agreement required that the sale of the system occur on or before June 30,
1997. However, this condition, among others, was not satisfied and therefore
the agreement to sell the Walnut Valley System was amended to extend the
closing date and the sale of the Walnut Valley System is now expected to
occur on or before September 30, 1997. The Company will pay Jones Financial
Group, Ltd. ("Financial Group"), a fee upon completion of any sale for acting
as the Company's financial advisor in connection with this transaction. All
fees paid to Financial Group by the Company are based upon 90% of the
estimated commercial rate charged by unaffiliated financial advisors.
The Unaudited Pro Forma Consolidated Balance Sheet reflects the purchase
of the Independence System, the purchase of the Albuquerque System and the
sale of the Walnut Valley System as if the transactions had occurred as of
June 30, 1997. In addition, the Unaudited Pro Forma Consolidated Balance
Sheet reflects the redemption of the Company's $160 million 11.5% Debentures
as if it were completed on June 30, 1997. The Consolidated Statements of
Operations for the year ended December 31, 1996 and the six months ended June
30, 1997 reflect (i) (a) the purchase of the North Prince Georges County
System on January 31, 1997, (b) the exchange of the Company's Colorado
systems for the Annapolis System on April 15, 1997, (c) the purchase of the
Manitowoc System on June 30, 1997, (d) the sale of 25,017,385 ordinary shares
of CWC in April and May 1997, and (e) the redemption of the 11.5% Debentures
on July 15, 1997, (ii) the proposed sale of the Walnut Valley Systems, (iii)
the proposed purchase of the Independence System and (iv) the proposed
purchase of the Albuquerque System as if the transactions had occurred on
the first day of the respective period presented.
<PAGE>
The capital required to complete the acquisitions of the Independence
System and the Albuquerque System are expected to be provided by the
Company's Credit Facilities. Proceeds from the sale of the Walnut Valley
System are expected to be used to reduce amounts outstanding on the Company's
Credit Facilities.
The Unaudited Pro Forma Financial Statements should be read in conjunction
with the Notes to Unaudited Pro Forma Financial Statements. The Unaudited
Pro Forma Statement of Operations is based on historical data and may not be
indicative of actual results obtained due to these transactions.
2
<PAGE>
JONES INTERCABLE, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
June 30, 1997
<TABLE>
<CAPTION>
As Redemption Purchase of Purchase of Sale of Pro
Reported 0f 11.5% Independence Albuquerque Walnut Valley Forma
6/30/97 Debentures System System System System
-------- ---------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS $ 6,174 $ - $ 748 $ (714) $ (34) $ 6,174
RESTRICTED CASH 912 - - - - 912
RECEIVABLES 20,327 - 1,124 2,107 (303) 23,255
INVESTMENT IN CABLE TELEVISION
PROPERTIES
Property, plant and equipment, net 469,894 - 42,800 55,700 (7,836) 560,558
Franchise Costs and Other
Intangibles, net 638,702 - 101,434 159,163 (3,247) 896,052
Investments in cable television
partnerships and affiliates 28,424 - (3,000) - - 25,424
---------- -------- -------- -------- -------- ----------
Total investment 1,137,020 - 141,234 214,863 (11,083) 1,482,034
DEFERRED TAX ASSET, NET 3,862 - - - - 3,862
DEPOSITS, PREPAIDS AND OTHER 85,390 (2,700) 422 1,881 (181) 84,812
---------- -------- -------- -------- -------- ----------
TOTAL ASSETS $1,253,685 $ (2,700) $143,528 $218,137 $(11,601) $1,601,049
========== ======== ======== ======== ======== ==========
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
LIABILITIES
Accounts payable and accrued
liabilities $ 113,205 $ - $ 2,179 $ 3,048 $ (266) $ 118,166
Subscriber prepayments and deposits 2,928 - 115 226 (252) 3,017
Subordinated debentures and
other debt 712,178 (160,000) - - - 552,178
Credit Facilities 230,500 170,800 141,234 214,863 (33,493) 723,904
---------- ---------- ------- -------- -------- ----------
Total liabilities 1,058,811 10,800 143,528 218,137 (34,011) 1,397,265
---------- ---------- ------- -------- -------- ----------
SHAREHOLDERS' INVESTMENT
Class A Common Stock 263 - - - - 263
Common Stock 51 - - - - 51
Additional Paid-in Capital 395,404 - - - - 395,404
Accumulated Deficit (200,844) (13,500) - - 22,410 (191,934)
---------- ---------- ------- -------- -------- ----------
Total shareholders' investment 194,874 (13,500) - - 22,410 203,784
---------- ---------- ------- -------- -------- ----------
Total Liabilities and
Shareholders' Investment $1,253,685 $ (2,700) $143,528 $218,137 $(11,601) $1,601,049
========== ========== ======== ======== ======== ==========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements
are an integral part of this balance sheet.
3
<PAGE>
JONES INTERCABLE, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the six months ended June 30, 1997
<TABLE>
<CAPTION>
As Sale of Purchase of Purchase of Pro
Reported Other Walnut Valley Independence Albuquerque Forma
6/30/97 Adjustments System System System 6/30/97
------- ----------- ------------ ----------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES FROM CABLE
TELEVISION OPERATIONS:
Cable Television Revenue
Subscriber service fees $ 158,312 $ 6,093 $ (3,864) $ 16,449 $ 24,191 $201,181
Management fees 9,035 - - (855) (1,313) 6,867
Distributions and brokerage fees 2,768 - - - - 2,768
Non-cable Revenue 4,321 - - - - 4,321
---------- ---------- ---------- --------- --------- --------
TOTAL REVENUES 174,436 6,093 (3,864) 15,594 22,878 215,137
COSTS AND EXPENSES:
Cable Television Expenses
Operating expenses 82,746 3,414 (2,270) 8,410 12,529 104,829
General and administrative
expenses 10,083 392 (93) 999 1,459 12,840
Non-cable operating, general
and administrative 4,694 - - - - 4,694
Depreciation and amortization 70,433 2,528 (720) 7,061 10,743 90,045
---------- ---------- ---------- --------- --------- --------
OPERATING INCOME 6,480 (241) (781) (876) (1,853) 2,729
OTHER INCOME (EXPENSE):
Interest expense (43,703) (1,499) 1,088 (1,503) (6,983) (52,600)
Equity in income (losses)
of affiliated entities (2,753) - - - - (2,753)
Interest income 803 - - - - 803
Gain on sale of assets 47,542 (44,563) - - - 2,979
Other, net (1,656) - - - - (1,656)
---------- ---------- ---------- --------- --------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 6,713 (46,303) 307 (2,379) (8,836) (50,498)
Income tax provision - - - - - -
---------- ---------- ---------- --------- --------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY
ITEM 6,713 (46,303) 307 (2,379) (8,836) (50,498)
EXTRAORDINARY ITEM
Loss on early extinguishment of
debt, net of related income taxes - (13,500) - - - (13,500)
---------- ---------- ---------- --------- --------- --------
NET INCOME (LOSS) $ 6,713 $ (59,803) $ 307 $ (2,379) $ (8,836) $(63,998)
========== ========== ========== ========== ========= =========
Earnings (Loss) Per Share $ .21 $ (2.04)
========== =========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements
are an integral part of this statement.
4
<PAGE>
JONES INTERCABLE, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
As Sale of Purchase of Purchase of Pro
Reported Other Walnut Valley Independence Albuquerque Forma
12/31/96 Adjustments System System System 12/31/96
-------- ----------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES FROM CABLE
TELEVISION OPERATIONS:
Cable Television Revenue
Subscriber service fees $ 248,626 $ 66,389 $ (7,230) $ 31,103 $ 45,592 $ 384,480
Distributions and brokerage fees 15,483 - - - - 15,483
Management fees 19,104 (457) - (1,614) (2,474) 14,559
Non-cable Revenue 28,497 (8,962) - - - 19,535
---------- --------- --------- --------- ---------- ---------
TOTAL REVENUES 311,710 56,970 (7,230) 29,489 43,118 434,057
COSTS AND EXPENSES:
Cable Television Expenses
Operating expenses 131,529 35,942 (4,313) 14,697 24,714 202,569
General and administrative
expenses 16,586 3,033 (501) 2,152 3,268 24,538
Non-cable operating, general
and administrative 28,410 (9,417) - - - 18,993
Depreciation and amortization 131,186 28,987 (1,399) 14,124 21,486 194,384
---------- --------- --------- --------- ---------- ---------
OPERATING INCOME 3,999 (1,575) (1,017) (1,484) (6,350) (6,427)
OTHER INCOME (EXPENSE):
Interest expense (67,782) (19,377) 2,177 (9,180) (13,966) (108,128)
Equity in income (losses)
of affiliated entities (3,473) - - - - (3,473)
Interest income 3,758 - - - - 3,758
Gain on sale of assets - - - - - -
Other, net 838 - - - - 838
---------- --------- --------- --------- ---------- ---------
INCOME (LOSS) BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM (62,660) (20,952) 1,160 (10,664) (20,316) (113,432)
Income tax provision - - - - - -
---------- --------- --------- -------- --------- ---------
INCOME (LOSS) BEFORE EXTRAORDINARY
ITEM (62,660) (20,952) 1,160 (10,664) (20,316) (113,432)
---------- --------- --------- -------- --------- --------
EXTRAORDINARY ITEM
Loss on early extinguishment of debt, net
of related income taxes - (13,500) - - - (13,500)
---------- --------- --------- -------- --------- --------
NET INCOME (LOSS) $ (62,660) $ (34,452) $ 1,160 $ (10,664) $ (20,316) $(126,932)
========== ========= ========= ========= ========= ========
Earnings (Loss) Per Share $ (2.00) $ (4.05)
========== ========
</TABLE>
The accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements
are an integral part of this statement.
5
<PAGE>
NOTES TO UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
(1) The Unaudited Pro Forma Consolidated Balance Sheet reflects the purchase of
the Independence System, the purchase of the Albuquerque System and the sale of
the Walnut Valley System as if the transactions had occurred as of June 30,
1997. In addition, the Unaudited Pro Forma Consolidated Balance Sheet reflects
the redemption of the Company's 11.5% Debentures as if it were completed on June
30, 1997. The Consolidated Statements of Operations for the year ended December
31, 1996 and the six months ended June 30, 1997 reflect (i) (a) the purchase of
the North Prince Georges County System on January 31, 1997, (b) the exchange of
the Company's Colorado systems for the Annapolis System on April 15, 1997, (c)
the purchase of the Manitowoc System on June 30, 1997, (d) the sale of
25,017,385 ordinary shares of CWC in April and May 1997, and (e) the redemption
of the 11.5% Debentures on July 15, 1997, (ii) the proposed sale of the Walnut
Valley Systems, (iii) the proposed purchase of the Independence System and (iv)
the proposed purchase of the Albuquerque System as if the transactions had
occurred as of the first day of the respective periods presented.
(2) The basis for the Unaudited Pro Forma Consolidated Statement of Operations
is the historical financials of the Company, the Independence System, the
Albuquerque System and the Walnut Valley System. The depreciation and
amortization of the acquired systems has been adjusted to reflect the Company's
basis in the assets. Interest expense has been adjusted as a result of changes
in debt balances due to the above transactions. In addition, management fee
revenue has been reduced to reflect the sale of the partnership systems.
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Jones Intercable, Inc.:
We have audited the accompanying statement of net assets to be acquired of
the cable television system serving certain areas in and around Albuquerque, New
Mexico (the "Albuquerque System") as of December 31, 1996, and the related
statements of operations of net assets to be acquired and cash flows of net
assets to be acquired for the year then ended. These financial statements are
the responsibility of Jones Intercable, Inc.'s management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
These statements have been prepared pursuant to the purchase and sale
agreement described in Note 9 between Cable TV Fund 12-BCD Venture and Jones
Intercable, Inc., dated July 28, 1997, and are not intended to be a complete
presentation of the Albuquerque System's financial position and operations.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets to be acquired of the Albuquerque
System as of December 31, 1996, and the results of its operations of net assets
to be acquired and its cash flows of nets assets to be acquired for the year
then ended, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado
July 28, 1997
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
-----------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
STATEMENT OF NET ASSETS TO BE ACQUIRED
--------------------------------------
As of December 31, 1996
-----------------------
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C>
CASH AND CASH EQUIVALENTS $ 228,652
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$231,149 at December 31, 1996 2,053,489
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 131,410,347
Less - accumulated depreciation (64,590,244)
------------
66,820,103
Franchise costs and other intangible assets, net of accumulated
amortization of $42,878,338 at December 31, 1996 9,345,162
------------
Total investment in cable television properties 76,165,265
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,426,337
------------
Total assets $ 79,873,743
------------
LIABILITIES AND NET ASSETS TO BE ACQUIRED
- -----------------------------------------
LIABILITIES:
Debt $ 659,043
Trade accounts payable and accrued liabilities 2,522,545
Subscriber prepayments 225,813
------------
Total liabilities 3,407,401
------------
COMMITMENTS AND CONTINGENCIES (Note 7)
NET ASSETS TO BE ACQUIRED $ 76,466,342
============
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
------------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
STATEMENT OF OPERATIONS OF NET ASSETS TO BE ACQUIRED
----------------------------------------------------
For the Year Ended December 31, 1996
------------------------------------
<TABLE>
<CAPTION>
<S> <C>
REVENUES: $49,487,923
COSTS AND EXPENSES:
Operating expenses 28,610,416
Management fees and allocated overhead from
Jones Intercable, Inc. 5,742,479
Depreciation and amortization 12,571,577
-----------
OPERATING INCOME 2,563,451
-----------
OTHER INCOME (EXPENSE):
Interest expense (69,046)
Loss on sale of assets (58,389)
Other, net (469,797)
-----------
Total other income (expense), net (597,232)
-----------
NET INCOME $ 1,966,219
===========
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
-----------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
STATEMENT OF CASH FLOWS OF NET ASSETS TO BE ACQUIRED
----------------------------------------------------
For the Year Ended December 31, 1996
------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,966,219
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 12,571,577
Decrease in trade receivables 198,085
Increase in deposits, prepaid expenses and
deferred charges (961,075)
Decrease in trade accounts payable and
accrued liabilities and subscriber prepayments (19,697)
-----------
Net cash provided by operating activities 13,755,109
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (12,562,807)
-----------
Net cash used in investing activities (12,562,807)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 324,626
Repayment of debt (257,987)
Decrease in advances from affiliates (1,265,900)
-----------
Net cash used in financing activities (1,199,261)
-----------
Decrease in cash and cash equivalents (6,959)
Cash and cash equivalents, beginning of year 235,611
===========
Cash and cash equivalents, end of year $ 228,652
===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 69,046
===========
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
------------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION
------------
Formation and Business
----------------------
On March 17, 1986, Cable TV Fund 12-B, Ltd. ("Fund 12-B"), Cable TV Fund
12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") formed Cable
TV Fund 12-BCD Venture (the "Venture"). The Venture was formed for the purpose
of acquiring certain cable television systems. At December 31, 1996, the
Venture owned and operated the cable television systems serving certain areas in
and around Albuquerque, New Mexico (the "Albuquerque System") and Palmdale,
California (the "Palmdale System"). Jones Intercable, Inc. ("Intercable")
manages the Albuquerque System and the Palmdale System on behalf of the Venture.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Presentation
---------------------
These financial statements include only the activity of the Albuquerque
System. All advances from affiliates and the credit facility used by the Venture
to purchase and manage the assets of the Albuquerque System are recorded at the
Venture level and are the liability of the Venture. Additionally, the related
interest expense amounts have not been allocated to the Albuquerque System and
remain on the books of the Venture. Since Intercable is only buying certain net
assets (see Note 9) and is not assuming these debts, such amounts are not
included herein.
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The preparation of financial statements in conformity with generally
accepted accounting principles requires Intercable's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Property, Plant and Equipment
-----------------------------
Depreciation is provided using the straight-line method over the following
estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation are written off as certain assets become fully depreciated and are
no longer in service.
<PAGE>
Intangible Assets
-----------------
Costs assigned to franchises and costs in excess of interests in net assets
purchased are amortized using the straight-line method over the following
remaining estimated useful lives:
Franchise costs 1 - 4 years
Costs in excess of interests in net assets purchased 29 - 30 years
Revenue Recognition
-------------------
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
Cash and Cash Equivalents
-------------------------
For purposes of the Statement of Cash Flows, the Albuquerque System
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
(3) TRANSACTIONS WITH INTERCABLE AND AFFILIATES
-------------------------------------------
Management Fees and Reimbursements
----------------------------------
Intercable manages the Albuquerque System and receives a fee for its
services equal to 5 percent of the gross revenues of the Albuquerque System,
excluding revenues from the sale of cable television systems or franchises.
Management fees paid to Intercable by the Albuquerque System totaled $2,474,396
in 1996.
The Albuquerque System reimburses Intercable for certain allocated overhead
and administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Albuquerque System. Such services, and their related costs, are necessary to
the operation of the Albuquerque System and would have been incurred by the
Albuquerque System if it was a stand alone entity. Allocations of personnel
costs are based primarily on actual time spent by employees of Intercable with
respect to each entity managed. Remaining expenses are allocated based on the
pro rata relationship of the Albuquerque System's revenues to the total revenues
of all systems owned or managed by Intercable and certain of its subsidiaries.
Systems owned by Intercable and all other systems owned by partnerships for
which Intercable is the general partner are also allocated a proportionate share
of these expenses. Intercable believes that the methodology used in allocating
overhead and administrative expenses is reasonable. Overhead and administrative
expenses allocated to the Albuquerque System by Intercable totaled $3,268,083 in
1996.
Payments to/from Affiliates for Programming Services
----------------------------------------------------
The Albuquerque System receives programming from Superaudio, Jones
Education Company, Great American Country, Inc. and Product Information Network,
all of which are affiliates of Intercable.
Payments to Superaudio totaled $70,656 in 1996. Payments to Jones
Education Company totaled $76,165 in 1996. Payments to Great American Country,
Inc., which initiated service in 1996, totaled $99,279.
The Albuquerque System receives a commission from Product Information
Network based on a percentage of advertising sales and number of subscribers.
Product Information Network paid commissions to the Albuquerque System totaling
$108,893 in 1996.
<PAGE>
(4) PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment as of December 31, 1996 consisted of the
following:
Cable distribution system $124,435,510
Equipment and tools 2,607,213
Office furniture and equipment 1,677,148
Buildings 695,488
Vehicles 1,543,413
Land 451,575
------------
131,410,347
Less-accumulated depreciation (64,590,244)
------------
$ 66,820,103
============
(5) DEBT
----
Debt as of December 31, 1996 consists of the following:
Capital lease obligations $ 659,043
============
Estimated maturities of the capital lease obligations for the five years in
the period ended December 31, 2001 and thereafter are $197,713, $197,713,
$197,713, $65,904, $ -0- and $ -0-.
At December 31, 1996, the carrying amount of the Albuquerque System's long-
term debt did not differ significantly from the estimated fair value of the
financial instruments. The fair value of the Albuquerque System's long-term
debt is estimated based on the discounted amount of future debt service payments
using rates of borrowing for a liability of similar risk.
(6) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners of Fund 12-B, Fund 12-C,
and Fund 12-D. The federal and state income tax returns of Fund 12-B, Fund 12-
C, and Fund 12-D are prepared and filed by Intercable.
(7) COMMITMENTS AND CONTINGENCIES
-----------------------------
Office and other facilities are rented under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $364,508, for the
year ended December 31, 1996. Minimum commitments under operating leases for
the five years in the period ending December 31, 2001 and thereafter are as
follows:
1997 $ 518,179
1998 530,724
1999 395,715
2000 345,715
2001 345,046
Thereafter 911,200
----------
$ 3,046,579
==========
<PAGE>
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information for the year ended December 31,
1996 is presented below:
Maintenance and repairs $ 747,264
==========
Taxes, other than income
and payroll taxes $ 376,950
==========
Advertising $ 1,051,130
==========
Depreciation of property,
plant and equipment $ 10,073,381
==========
Amortization of intangible
assets $ 2,498,196
==========
(9) SUBSEQUENT EVENT
----------------
On July 28, 1997, the Venture entered into purchase and sale agreement to
sell the Albuquerque System to Intercable for a sales price of $222,963,267,
subject to customary closing adjustments.
<PAGE>
CABLE TELEVISION SYSTEM SERVING
-------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
UNAUDITED STATEMENT OF NET ASSETS TO BE ACQUIRED
------------------------------------------------
As of June 30, 1997
-------------------
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C>
CASH AND CASH EQUIVALENTS $ 217,486
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables of
$311,865 at June 30, 1997 2,107,358
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 136,992,831
Less - accumulated depreciation (70,009,608)
------------
66,983,223
Franchise costs and other intangible assets, net of accumulated
amortization of $44,127,435 at June 30, 1997 8,096,065
------------
Total investment in cable television properties 75,079,288
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 1,881,434
------------
Total assets $ 79,285,566
------------
LIABILITIES AND NET ASSETS TO BE ACQUIRED
- -----------------------------------------
LIABILITIES:
Debt $ 702,176
Trade accounts payable and accrued liabilities 2,346,470
Subscriber prepayments 226,168
------------
Total liabilities 3,274,814
------------
NET ASSETS TO BE ACQUIRED $ 76,010,752
============
</TABLE>
The accompanying unaudited notes to financial statements
are an integral part of this unaudited statement.
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
------------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
UNAUDITED STATEMENT OF OPERATIONS OF NET ASSETS TO BE ACQUIRED
--------------------------------------------------------------
For the Six Months Ended June 30, 1997
--------------------------------------
REVENUES: $26,253,572
COSTS AND EXPENSES:
Operating expenses 14,688,611
Management fees and allocated overhead from
Jones Intercable, Inc. 2,772,113
Depreciation and amortization 6,784,799
-----------
OPERATING INCOME 2,008,049
-----------
OTHER INCOME (EXPENSE):
Interest expense (48,171)
Other, net 13,523
-----------
Total other income (expense), net (34,648)
-----------
NET INCOME $ 1,973,401
===========
The accompanying notes to unaudited financial statements
are an integral part of this unaudited statement.
<PAGE>
THE CABLE TELEVISION SYSTEM SERVING
-----------------------------------
ALBUQUERQUE, NEW MEXICO
-----------------------
UNAUDITED STATEMENT OF CASH FLOW OF NET ASSETS TO BE ACQUIRED
-------------------------------------------------------------
For the Six Months Ended June 30, 1997
--------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,973,401
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 6,784,799
Increase in trade receivables (53,869)
Increase in deposits, prepaid expenses and
deferred charges (9,105)
Decrease in trade accounts payable and
accrued liabilities and subscriber prepayments (175,720)
-----------
Net cash provided by operating activities 8,519,506
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (5,582,484)
-----------
Net cash used in investing activities (5,582,484)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 186,527
Repayment of debt (143,394)
Decrease in advances from affiliates (2,991,321)
-----------
Net cash used in financing activities (2,948,188)
-----------
Decrease in cash and cash equivalents (11,166)
Cash and cash equivalents, beginning of period 228,652
-----------
Cash and cash equivalents, end of period $ 217,486
===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 48,171
===========
The accompanying notes to unaudited financial statements
are an integral part of this unaudited statement.
<PAGE>
ALBUQUERQUE, NEW MEXICO
-----------------------
UNAUDITED NOTES TO FINANCIAL STATEMENTS
---------------------------------------
(1) ORGANIZATION
------------
Formation and Business
----------------------
On March 17, 1986, Cable TV Fund 12-B, Ltd. ("Fund 12-B"), Cable TV Fund
12-C, Ltd. ("Fund 12-C") and Cable TV Fund 12-D, Ltd. ("Fund 12-D") formed Cable
TV Fund 12-BCD Venture (the "Venture"). The Venture was formed for the purpose
of acquiring certain cable television systems. At June 30, 1997, the Venture
owned and operated the cable television systems serving certain areas in and
around Albuquerque, New Mexico (the "Albuquerque System") and Palmdale,
California (the "Palmdale System"). Jones Intercable, Inc. ("Intercable")
manages the Albuquerque System and Palmdale System on behalf of the Venture.
On July 28, 1997, the Venture entered into an asset purchase agreement to
sell the Albuquerque System to Intercable for a sales price of $222,963,267,
subject to customary closing adjustments.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Presentation
---------------------
These financial statements include only the activity of the Albuquerque
System. All advances from affiliates and the credit facility used by the Venture
to purchase and manage the assets of the Albuquerque System are recorded at the
Venture level and are the liability of the Venture. Additionally, the related
interest expense amounts have not been allocated to the Albuquerque System and
remain on the books of the Venture. Since Intercable is only buying certain net
assets and is not assuming these debts, such amounts are not included herein.
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The preparation of financial statements in conformity with generally
accepted accounting principles requires Intercable's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Property, Plant and Equipment
-----------------------------
Depreciation is provided using the straight-line method over the following
estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation are written off as certain assets become fully depreciated and are
no longer in service.
<PAGE>
Intangible Assets
-----------------
Costs assigned to franchises and costs in excess of interests in net assets
purchased are amortized using the straight-line method over the following
remaining estimated useful lives:
Franchise costs 1 - 4 years
Costs in excess of interests in net assets purchased 29 - 30 years
Revenue Recognition
-------------------
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
Cash and Cash Equivalents
-------------------------
For purposes of the Statement of Cash Flows, the Albuquerque System
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.
(3) TRANSACTIONS WITH INTERCABLE AND AFFILIATES
-------------------------------------------
Management Fees and Reimbursements
----------------------------------
Intercable manages the Albuquerque System and receives a fee for its
services equal to 5 percent of the gross revenues of the Albuquerque System,
excluding revenues from the sale of cable television systems or franchises.
Management fees paid to Intercable by the Albuquerque System totaled $1,312,679
for the six months ended June 30, 1997.
The Albuquerque System reimburses Intercable for certain allocated overhead
and administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Albuquerque System. Such services, and their related costs, are necessary to
the operation of the Albuquerque System and would have been incurred by the
Albuquerque System if it was a stand alone entity. Allocations of personnel
costs are based primarily on actual time spent by employees of Intercable with
respect to each entity managed. Remaining expenses are allocated based on the
pro rata relationship of the Albuquerque System's revenues to the total revenues
of all systems owned or managed by Intercable and certain of its subsidiaries.
Systems owned by Intercable and all other systems owned by partnerships for
which Intercable is the general partner are also allocated a proportionate share
of these expenses. Intercable believes that the methodology used in allocating
overhead and administrative expenses is reasonable. Overhead and administrative
expenses allocated to the Albuquerque System by Intercable totaled $1,459,434
for the six months ended June 30, 1997.
Payments to/from Affiliates for Programming Services
----------------------------------------------------
The Albuquerque System receives programming from Superaudio, Jones
Education Company, Great American Country, Inc. and Product Information Network,
all of which are affiliates of Intercable.
Payments to Superaudio, Jones Education Company and Great American Country,
Inc., totaled $40,111, $40,231 and $51,916, respectively, for the six month
period ended June 30, 1997.
The Albuquerque System receives a commission from Product Information
Network based on a percentage of advertising sales and number of subscribers.
Product Information Network commission paid to the Albuquerque System totaled
$56,789 for the six month period ended June 30, 1997.
<PAGE>
(4) PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment as of June 30, 1997 consisted of the
following:
Cable distribution system $ 129,492,724
Equipment and tools 2,700,984
Office furniture and equipment 1,791,455
Buildings 695,488
Vehicles 1,860,605
Land 451,575
-----------
136,992,831
Less-accumulated depreciation (70,009,677)
-----------
$ 66,983,223
===========
(5) DEBT
----
Debt as of June 30, 1997 consists of the following:
Capital lease obligations $ 702,176
===========
At June 30, 1997, the carrying amount of the Albuquerque System's long-term
debt did not differ significantly from the estimated fair value of the financial
instruments. The fair value of the Albuquerque System's long-term debt is
estimated based on the discounted amount of future debt service payments using
rates of borrowing for a liability of similar risk.
(6) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners of Fund 12-B, Fund 12-C,
and Fund 12-D. The federal and state income tax returns of Fund 12-B, Fund 12-
C, and Fund 12-D are prepared and filed by Intercable.
<PAGE>
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
------ ------------- ------------
<S> <C> <C>
CASH $ 451,992 $ 616,013
TRADE RECEIVABLES, less allowance for doubtful
receivables of $49,782 and $116,097 at
June 30, 1997 and December 31, 1996, respectively 1,123,814 1,309,354
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 83,357,843 76,071,150
Less- accumulated depreciation (37,259,292) (34,144,942)
------------ ------------
46,098,551 41,926,208
Franchise costs and other intangible assets, net of
accumulated amortization of $44,428,718 and
$42,711,158 at June 30, 1997 and December 31, 1996,
respectively 3,672,592 5,390,152
------------ ------------
Total investment in cable
television properties 49,771,143 47,316,360
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 487,450 308,253
------------ ------------
Total assets $ 51,834,399 $ 49,549,980
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL 1997 1996
--------------------------------- ------------- -------------
<S> <C> <C>
LIABILITIES:
Credit facility $ 35,000,000 $ 30,700,000
Capital lease obligations 299,794 296,647
Accrued distributions to Class A Unitholders 1,248,395 1,248,395
Accounts payable and accrued liabilities 1,878,800 2,637,438
Subscriber prepayments 114,809 114,398
------------- -------------
Total liabilities 38,541,798 34,996,878
------------- -------------
PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Accumulated earnings 20,083 7,720
------------- -------------
21,083 8,720
------------- -------------
Class A Unitholders-
Net contributed capital (8,322,632 units
outstanding at June 30, 1997 and
December 31, 1996) 116,433,492 116,433,492
Accumulated earnings 1,988,178 764,252
Distributions to Unitholders (105,150,152) (102,653,362)
------------- -------------
13,271,518 14,544,382
------------- -------------
Total liabilities and partners' capital $ 51,834,399 $ 49,549,980
============= =============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
<PAGE>
JONES INTERCABLE INVESTORS, L. P.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------- -------------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---------- ---------- ----------- -----------
REVENUES $8,869,548 $8,038,701 $17,108,914 $15,816,318
COSTS AND EXPENSES:
Operating expenses 4,363,463 3,867,859 8,410,150 7,821,206
Management fees and allocated overhead
from General Partner 909,435 951,561 1,884,383 1,867,130
Depreciation and amortization 2,512,231 2,107,401 4,921,784 4,214,832
---------- ---------- ----------- -----------
OPERATING INCOME 1,084,419 1,111,880 1,892,597 1,913,150
---------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (613,878) (494,686) (1,173,596) (1,023,954)
Other, net (89,077) 109,626 517,288 5,511
---------- ---------- ----------- -----------
Total other income (expense), net (702,955) (385,060) (656,308) (1,018,443)
---------- ---------- ----------- -----------
NET INCOME $ 381,464 $ 726,820 $ 1,236,289 $ 894,707
========== ========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $ 3,815 $ 7,268 $ 12,363 $ 8,947
========== ========== =========== ===========
Class A Unitholders $ 377,649 $ 719,552 $ 1,223,926 $ 885,760
========== ========== =========== ===========
NET INCOME PER CLASS A UNIT $.05 $.09 $.15 $.11
========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
CLASS A UNITS OUTSTANDING 8,322,632 8,322,632 8,322,632 8,322,632
========== ========== =========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
<PAGE>
JONES INTERCABLE INVESTORS, L. P.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
--------------------------
<S> <C> <C>
1997 1996
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,236,289 $ 894,707
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,921,784 4,214,832
Decrease in trade receivables 185,540 419,039
Increase in deposits, prepaid expenses
and deferred charges (269,071) (104,980)
Decrease in accounts payable, accrued
liabilities and subscriber prepayments (758,227) (953,259)
----------- -----------
Net cash provided by operating activities 5,316,315 4,470,339
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (7,286,693) (3,121,053)
----------- -----------
Net cash used in investing activities (7,286,693) (3,121,053)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 4,393,012 1,800,000
Repayment of debt (89,865) (133,171)
Distributions to unitholders (2,496,790) (2,496,790)
----------- -----------
Net cash provided by (used in) financing activities 1,806,357 (829,961)
----------- -----------
Increase (decrease) in cash (164,021) 519,325
Cash, beginning of period 616,013 91,518
----------- -----------
Cash, end of period $ 451,992 $ 610,843
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,104,216 $ 948,728
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Jones Intercable Investors, L.P. (the
"Partnership") at June 30, 1997 and December 31, 1996, its Statements of
Operations for the three and six month periods ended June 30, 1997 and 1996 and
its Statements of Cash Flows for the six month periods ended June 30, 1997 and
1996. Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
The Partnership owns and operates the cable television system serving areas
in and around Independence, Missouri (the "Independence System"). Jones
Intercable, Inc. ("Intercable"), a publicly held Colorado corporation, is the
"General Partner."
(2) On February 28, 1997, the Partnership entered into an asset purchase
agreement to sell the Independence System to Jones Cable Holdings II, Inc., a
wholly owned subsidiary of the General Partner, for a sales price of
$171,213,667, which represents the average of three independent appraisals of
the fair market value of the Independence System. Upon the closing of the sale
of the Independence System, the Partnership will repay the then-outstanding
balance on its credit facility, pay a brokerage fee of $4,280,342 to The Jones
Group, Ltd., a subsidiary of the General Partner, and then the Partnership will
distribute the net proceeds to the Class A Unitholders. Such distribution is
expected to be approximately $16.12 for each Class A Unit held. Because this
distribution plus previous distributions made to Class A Unitholders will not
equal the preferred return to the limited partners set forth in the Partnership
Agreement, there will be no general partner distribution related to this
transaction; however, the General Partner will receive a distribution as a Class
A Unitholder. The Independence System is the Partnership's only remaining asset.
Upon the successful completion of the sale of the Independence System, the
Partnership will be liquidated and dissolved. The closing of this sale is
expected to occur in the second half of 1997.
(3) Intercable manages the Partnership and receives a fee for its services
equal to 5 percent of the gross revenues of the Partnership, excluding revenues
from the sale of cable television systems or franchises. Management fees for the
three and six month periods ended June 30, 1997 were $443,477 and $855,446,
respectively, compared to $401,935 and $790,816, respectively, for the similar
1996 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing services
and other facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operation of the Partnership and would have been incurred by the Partnership, if
it was a stand alone entity. Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner with respect to each
partnership managed. Remaining expenses are allocated based on the pro rata
relationship of the Partnership's revenues to the total revenues of all systems
owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which Intercable is the general partner are also allocated a proportionate
share of these expenses. The General Partner believes that the methodology used
in allocating overhead and administrative expenses is reasonable. Amounts
charged the Partnership by the General Partner for allocated overhead and
administrative expenses for the three and six month periods ended June 30, 1997
were $465,958 and $1,028,937, respectively, compared to $549,626 and $1,076,314,
respectively, for the similar 1996 periods.
(4) Certain prior year amounts have been reclassified to conform to the 1997
presentation.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of Jones Intercable Investors, L.P.:
We have audited the accompanying balance sheets of JONES INTERCABLE
INVESTORS, L.P. (a Colorado limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jones Intercable
Investors, L.P. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 7, 1997.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
---------------------------
<S> <C> <C>
ASSETS (Note 1) 1996 1995
------ ------------ ------------
CASH $ 616,013 $ 91,518
TRADE RECEIVABLES, less allowance for doubtful
receivables of $116,097 and $82,938 at
December 31, 1996 and 1995, respectively 1,309,354 1,378,312
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 76,071,150 67,139,530
Less- accumulated depreciation (34,144,942) (29,510,807)
------------ ------------
41,926,208 37,628,723
Franchise costs and other intangible assets, net of
accumulated amortization of $42,711,158 and
$39,276,038 at December 31, 1996 and 1995, respectively 5,390,152 8,825,272
------------ ------------
Total investment in cable
television properties 47,316,360 46,453,995
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 308,253 151,688
------------ ------------
Total assets $ 49,549,980 $ 48,075,513
============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
----------------------------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
------------------------------------------- ------------- ------------
LIABILITIES:
Credit facility $ 30,700,000 $ 26,450,000
Capital lease obligations 296,647 311,696
Accrued distributions to Class A Unitholders 1,248,395 1,248,395
Accounts payable and accrued liabilities 2,637,438 2,146,992
Subscriber prepayments 114,398 118,157
------------- ------------
Total liabilities 34,996,878 30,275,240
------------- ------------
COMMITMENTS AND CONTINGENCIES (Note 8)
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated earnings (deficit) 7,720 (9,744)
------------- ------------
8,720 (8,744)
------------- ------------
Class A Unitholders-
Net contributed capital
(8,322,632 units outstanding
at December 31, 1996 and 1995) 116,433,492 116,433,492
Accumulated earnings (deficit) 764,252 (964,692)
Distributions to Unitholders (102,653,362) (97,659,783)
------------- ------------
14,544,382 17,809,017
------------- ------------
Total liabilities and
partners' capital (deficit) $ 49,549,980 $ 48,075,513
============= ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES $32,281,131 $29,865,310 $27,522,625
COSTS AND EXPENSES:
Operating expenses 15,875,256 15,044,764 13,757,025
Management fees and allocated
overhead from General Partner 3,766,038 3,631,737 3,450,694
Depreciation and amortization 8,668,624 7,881,118 8,351,439
----------- ----------- -----------
OPERATING INCOME 3,971,213 3,307,691 1,963,467
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (2,075,840) (1,926,459) (1,289,491)
Interest income 6,175 6,274 7,899
Other, net (155,140) (593,075) (103,819)
----------- ----------- -----------
Total other income (expense), net (2,224,805) (2,513,260) (1,385,411)
----------- ----------- -----------
NET INCOME $ 1,746,408 $ 794,431 $ 578,056
=========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $ 17,464 $ 7,944 $ 5,781
=========== =========== ===========
Class A Unitholders $ 1,728,944 $ 786,487 $ 572,275
=========== =========== ===========
NET INCOME PER CLASS A UNIT $ .21 $ .09 $ .07
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF CLASS A
UNITS OUTSTANDING 8,322,632 8,322,632 8,322,632
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
General Partner:
Balance, beginning of year $ (8,744) $ (16,688) $ (22,469)
Net income for year 17,464 7,944 5,781
----------- ----------- -----------
Balance, end of year $ 8,720 $ (8,744) $ (16,688)
=========== =========== ===========
Class A Unitholders:
Balance, beginning of year $17,809,017 $22,016,109 $26,437,414
Net income for year 1,728,944 786,487 572,275
Distributions to Unitholders (4,993,579) (4,993,579) (4,993,580)
----------- ----------- -----------
Balance, end of year $14,544,382 $17,809,017 $22,016,109
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,746,408 $ 794,431 $ 578,056
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,668,624 7,881,118 8,351,439
Decrease (increase) in trade receivables 68,958 (636,997) 13,003
Increase in deposits, prepaid expenses
and deferred charges (242,293) (153,990) (66,526)
Increase in accounts payable and accrued
liabilities and subscriber prepayments 486,687 448,988 345,542
----------- ----------- -----------
Net cash provided by operating activities 10,728,384 8,333,550 9,221,514
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (9,445,261) (7,123,730) (8,451,389)
----------- ----------- -----------
Net cash used in investing activities (9,445,261) (7,123,730) (8,451,389)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 5,015,615 4,878,614 7,064,889
Repayment of debt (780,664) (1,610,759) (2,600,520)
Distributions to unitholders (4,993,579) (4,993,579) (4,993,580)
----------- ----------- -----------
Net cash used in financing activities (758,628) (1,725,724) (529,211)
----------- ----------- -----------
Increase (decrease) in cash 524,495 (515,904) 240,914
Cash, beginning of year 91,518 607,422 366,508
----------- ----------- -----------
Cash, end of year $ 616,013 $ 91,518 $ 607,422
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,104,973 $ 1,977,214 $ 1,072,838
=========== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
<PAGE>
JONES INTERCABLE INVESTORS, L.P.
--------------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION OF PARTNERSHIP
---------------------------
Formation and Business
----------------------
Jones Intercable Investors, L.P. (the "Partnership"), a Colorado limited
partnership, was formed on September 18, 1986, to acquire, own and operate cable
television systems in the United States. On November 28, 1986, the Partnership
completed the sale of 3,230,000 Class A Units, representing beneficial ownership
of Class A Limited Partnership Interests, to the public at a price of $16.00 per
Class A Unit. On May 23, 1987, the Partnership completed the sale of an
additional 4,300,000 Class A Units, representing beneficial ownership of Class A
Limited Partnership Interests to Jones Intercable, Inc. ("Intercable") (800,000
Units) and to the public at a price of $15.00 per Class A Unit. In addition to
its 800,000 Class A Units, Intercable purchased, through a series of
transactions, 792,632 Class B Units. These purchases by Intercable represent a
19 percent ownership interest in the Partnership. At December 31, 1989, all
Class B Units were converted to Class A Units. Intercable is the general
partner of the Partnership (the "General Partner"). The General Partner and its
subsidiaries also own and operate cable television systems. In addition, the
General Partner manages cable television systems for other limited partnerships
for which it is general partner and, also, for affiliated entities.
At December 31, 1996, the Partnership owned the cable television system
serving certain communities in and around Independence, Missouri.
Cable Television System Sale and Partnership Liquidation
--------------------------------------------------------
On February 28, 1997, the Partnership entered into an asset purchase
agreement to sell the Independence System to Jones Cable Holdings II, Inc., a
wholly owned subsidiary of the General Partner, for a sales price of
$171,213,667, which represents the average of three independent appraisals of
the fair market value of the Independence System. Upon the closing of the sale
of the Independence System, the Partnership will repay the then-outstanding
balance on its credit facility, pay a brokerage fee of $4,280,342 to The Jones
Group, Ltd., a subsidiary of the General Partner, and then the Partnership will
distribute the net proceeds to the Class A Unitholders. Such distribution is
expected to be approximately $16.12 for each Class A Unit held. Because this
distribution plus previous distributions made to Class A Unitholders will not
exceed the preferred return set forth in the Partnership Agreement, there will
be no general partner distribution related to this transaction; however, the
General Partner will receive a distribution as a Class A Unitholder. The
Independence System is the Partnership's only remaining asset. Upon the
successful completion of the sale of the Independence System, the Partnership
will be liquidated and dissolved.
Contributed Capital of the Partnership
--------------------------------------
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit).
All profits and losses of the Partnership are allocated 99 percent to the
Unitholders and 1 percent to the General Partner.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Records
------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Partnership's tax returns are also prepared on the accrual basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities
<PAGE>
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Partnership Acquisitions
------------------------
The Partnership's acquisitions were accounted for using the "purchase
method" of accounting. The allocation of the purchase price (determined by
independent appraisal) was as follows: first, to the fair value of net tangible
assets acquired; second, to the value of subscriber lists; third, to franchise
costs; and fourth, to costs in excess of interests in net assets purchased.
Property, Plant and Equipment
-----------------------------
Depreciation of property, plant and equipment is provided primarily using
the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation are written off as certain assets become fully depreciated and are
no longer in service.
Intangible Assets
-----------------
Costs assigned to franchises and costs in excess of interests in net assets
purchased are being amortized using the straight-line method over the following
remaining estimated useful lives:
Franchise costs 1 - 2 years
Costs in excess of interests
in net assets purchased 30 years
Revenue Recognition
-------------------
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
----------------------------------------------------
Management Fees, Reimbursements of Allocated Expenses and Distribution
----------------------------------------------------------------------
Ratios
------
The General Partner manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the years ended December 31, 1996, 1995 and 1994 were $1,614,057,
$1,493,266 and $1,376,131, respectively.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing services
and other facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operation of the Partnership and would have been incurred by the Partnership, if
it was a stand alone entity. Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner with respect to each
partnership managed. Remaining expenses are allocated based on the pro rata
relationship of the Partnership's revenues to the total revenues of all systems
owned or managed by the General Partner and certain of its subsidiaries.
Systems owned by the General Partner and all other systems owned by partnerships
for which Intercable is the general partner are also allocated a
<PAGE>
proportionate share of these expenses. The General Partner believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Amounts charged the Partnership by the General Partner for allocated
overhead and administrative expenses for the years ended December 31, 1996, 1995
and 1994 were $2,151,981, $2,138,471 and $2,074,563, respectively.
Distributions made upon the sale or refinancing of a Partnership cable
television system or upon dissolution of the Partnership shall be made as
follows: first, to the Class A Unitholders an amount equal to the Preferred
Return. The "Preferred Return" is defined as a return equal to 10 percent per
annum, cumulative and non-compounded on an amount equal to the capital
contribution made with respect to a Class A Unit, less any portion of such
amount which has been returned to Class A Units from prior sale or refinancing
proceeds; provided that such return will be reduced by all prior distributions
of cash flow from operations on the Class A Units, and certain prior
distributions of proceeds from sales or refinancing of Partnership cable
television properties; second, to the Class A Unitholders an amount equal to the
capital originally contributed; third, 60 percent to Class A Unitholders and 40
percent to the General Partner.
The Partnership is charged interest on accounts payable to the General
Partner at a rate which approximates the General Partner's weighted average cost
of borrowing. There was no interest charged to the Partnership by the General
Partner during 1996, 1995 and 1994.
Payments to/from Affiliates for Programming Services
----------------------------------------------------
The Partnership receives programming from Superaudio, Jones Education
Company and Product Information Network, all of which are affiliates of the
General Partner.
Payments to Superaudio totaled approximately $51,871, $45,956 and $46,113
in 1996, 1995 and 1994, respectively. Payments to Jones Education Company
totaled approximately $55,913, $49,159 and $41,783 in 1996, 1995 and 1994,
respectively.
The Partnership receives a commission from Product Information Network
based on a percentage of advertising revenue and number of subscribers. Product
Information Network paid commissions to the Partnership totaling $30,104,
$11,148 and $4,073 in 1996, 1995 and 1994, respectively.
(4) DISTRIBUTIONS TO UNITHOLDERS
----------------------------
The Partnership declared a $.15 per unit distribution for each of the four
quarters of 1996. All declared distributions were paid at December 31, 1996,
except for the fourth quarter distribution, which was paid in February 1997.
The Partnership expects that cash distributions will continue to be paid
quarterly until the sale of the Independence System is closed; however, the
level of such distributions will be determined on a quarter-by-quarter basis.
(5) PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment as of December 31, 1996 and 1995, consists of
the following:
December 31,
----------------------------
1996 1995
------------ ------------
Cable distribution systems $ 70,640,008 $ 61,887,816
Equipment and tools 1,795,869 1,714,326
Office furniture and equipment 825,535 642,237
Buildings 1,209,479 1,178,013
Vehicles 1,549,259 1,666,138
Land 51,000 51,000
------------ ------------
76,071,150 67,139,530
Less - accumulated depreciation (34,144,942) (29,510,807)
------------ ------------
$ 41,926,208 $ 37,628,723
============ ============
<PAGE>
(6) DEBT
----
Debt consists of the following: December 31,
---------------------------
1996 1995
------------ ------------
Lending institutions-
Revolving credit facility $ 30,700,000 $ 26,450,000
Capital lease obligations 296,647 311,696
------------ ------------
$ 30,996,647 $ 26,761,696
============ ============
The maximum amount available under the Partnership's revolving credit
facility is $35,000,000. As of December 31, 1996, $30,700,000 was outstanding,
leaving $4,300,000 of available borrowings for future needs. Under the terms of
the credit agreement as amended, the revolving credit facility expires on
December 31, 1998. Interest on outstanding principal balances is at the
Partnership's option of the Prime Rate plus .25 percent, the Certificate of
Deposit Rate plus 1.25 percent or the Euro-rate plus 1.25 percent. The
effective interest rates on amounts outstanding as of December 31, 1996 and 1995
were 6.84 percent and 7.25 percent, respectively.
Installments due on debt principal and capital lease obligations for each
of the five years in the period ending December 31, 2001 and thereafter,
respectively, are $88,994, $30,788,994, $88,994, $29,665, $-0- and $-0-. All
indebtedness is expected to be repaid upon the completion of the sale of the
Independence System. At December 31, 1996, substantially all of the
Partnership's property, plant and equipment secured the above indebtedness.
At December 31, 1996, the carrying amount of the Partnership's long-term
debt did not differ significantly from the estimated fair value of the financial
instruments. The fair value of the Partnership's long-term debt is estimated
based on the discounted amount of future debt service payments using rates of
borrowing for a liability of similar risk.
(7) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because the Partnership will pay no federal or state income taxes as
an entity. Instead, all of the income, gains, losses, deductions and credits of
the Partnership will pass through to the General Partner and the Unitholders.
The federal and state income tax returns of the Partnership are prepared and
filed by the General Partner.
The Partnership's tax returns, the qualification of the Partnership as such
for tax purposes, and the amount of distributable Partnership income or loss are
subject to examination by federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the General Partner and Unitholders would likely be
changed.
Taxable income to the General Partner and Unitholders is different from
that reported in the statements of operations largely due to the difference in
depreciation recognized under generally accepted accounting principles and the
expense allowed for tax purposes under the Modified Accelerated Cost Recovery
System. Since the Partnership has previously made an IRC Section 754 election,
the cost basis of the Partnership assets has been increased or decreased to
reflect the difference between the new unitholders' purchase price and their
proportionate share of the adjusted tax basis of the Partnership properties.
The portion of this adjustment which relates to depreciable or amortizable
assets results in difference between book and tax depreciation or amortization.
Under IRC Section 197, certain intangibles placed in service after August 10,
1993, including goodwill, are allowed to be amortized over a 15 year period for
tax purposes, creating additional book and tax amortization differences. There
are no other significant differences between taxable loss and the net loss
reported in the statements of operations.
The Partnership will be taxed as a corporation beginning January 1, 1998,
if it operates its current business at such time. The Partnership intends to
sell its assets and liquidate prior to such date. Current tax law impacts the
Unitholders due to limitations on the utilization of passive losses generated by
the Partnership. Investors in Publicly Traded Partnerships ("PTP's"), such as
Jones Intercable Investors, L.P., are subject to additional limitations under
the passive-activity loss rules as amended by the Revenue Act of 1987. Passive
losses reported on Schedule K-1, Form 1065,
<PAGE>
by a PTP can only be used to offset passive income from the same partnership.
Passive losses of a PTP which are limited by this rule may be carried forward.
(8) COMMITMENTS AND CONTINGENCIES
-----------------------------
The Partnership rents office and other facilities under various long-term
operating lease arrangements. Rent paid under such lease arrangements totaled
$163,164, $166,127 and $147,185, respectively, for the years ended December 31,
1996, 1995 and 1994. Minimum commitments for each of the five years in the
period ending December 31, 2001, and thereafter are as follows:
1997 $148,551
1998 131,196
1999 43,199
2000 7,200
2001 7,200
Thereafter 34,800
--------
$372,146
========
(9) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information for the respective years is
presented below:
<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ 351,832 $ 356,537 $ 303,262
========== ========== ==========
Taxes, other than income and payroll taxes $ 327,288 $ 252,921 $ 199,752
========== ========== ==========
Advertising $ 303,881 $ 297,727 $ 319,442
========== ========== ==========
Depreciation of property, plant and equipment $5,233,504 $4,429,581 $3,639,053
========== ========== ==========
Amortization of intangible assets $3,435,120 $3,451,537 $4,712,386
========== ========== ==========
</TABLE>
<PAGE>
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
---------------------------
THIS PURCHASE AND SALE AGREEMENT is made as of the 28th day of
February, 1997, by and between JONES INTERCABLE INVESTORS, L.P., a Colorado
limited partnership ("Seller"), and JONES INTERCABLE, INC., a Colorado
corporation ("Buyer").
RECITALS
--------
A. Seller owns and operates a cable television system in and around
the municipalities of Independence, Missouri and Olathe, Kansas (the "System").
B. Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the System upon the terms and conditions set forth in this
Agreement.
AGREEMENT
---------
In consideration of the mutual promises contained in this Agreement
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Purchase and Sale. Subject to the terms and conditions set forth
-----------------
in this Agreement, Seller hereby agrees to sell, convey, assign, transfer and
deliver to Buyer, and Buyer hereby agrees to purchase from Seller, on the
Closing Date (as defined in Paragraph 9 hereof), all of Seller's right, title
and interest in and to the System and the Assets (as defined in Paragraph 2
hereof) then being transferred and sold pursuant hereto, free and clear of all
security interests, liens, pledges, charges and encumbrances.
2. Assets. (a) The assets to be conveyed to Buyer hereunder shall
------
consist of all of the assets and properties of Seller, whether real, personal,
tangible or intangible, of whatever description and wherever located, now owned
or used by Seller solely in connection with Seller's ownership or operation of
the System, except those items excluded pursuant to subparagraph 2(b) hereof,
but including all additions made to the Closing Date, to the end that all of
Seller's assets owned on the Closing Date which are used or owned solely in
connection with Seller's ownership or operation of the System shall pass to
Buyer. Such assets (collectively, the "Assets") shall include, without
limitation:
(i) all of Seller's towers, tower equipment, antennas,
aboveground and underground cable, distribution systems, headend amplifiers,
line amplifiers, earth satellite receive stations and related equipment,
microwave equipment,
<PAGE>
testing equipment, motor vehicles, office equipment, furniture and fixtures,
supplies, inventory and other physical assets owned or used by Seller solely in
connection with Seller's ownership or operation of the System;
(ii) the franchises, leases, agreements, permits, consents,
licenses and other contracts, pole line or joint pole agreements, underground
conduit agreements, agreements for the reception or transmission of signals by
microwave, easements, rights-of-way and construction permits, if any, and any
other obligations and agreements between Seller and suppliers and customers,
which are owned or used by Seller solely in connection with Seller's ownership
and operation of the System;
(iii) the real property owned and used solely in connection with
the System;
(iv) all accounts receivable of Seller arising in connection
with the System;
(v) all engineering records, files, data, drawings,
blueprints, schematics, maps, reports, lists and plans and processes owned or
developed by or for Seller and intended for use in connection with the System;
(vi) all promotional graphics, original art work, mats, plates,
negatives and other advertising, or related materials developed by or for Seller
and intended for use in connection with the System;
(vii) all of Seller's correspondence files, lists, records and
reports concerning customers and prospective customers of the Systems,
concerning television stations whose transmissions are or may be carried as part
of the Systems and concerning all dealings with federal, state, and local
regulatory agencies, including all reports filed by or on behalf of Seller with
the Federal Communications Commission (the "FCC") in connection with the System
and any Statements of Account of the System filed by or on behalf of Seller with
the united States Copyright Office in connection with the System
(b) The following properties and assets relating to the System and its
business operations shall be retained by Seller and shall not be sold, assigned
or transferred to Buyer;
(i) cash or cash equivalents on hand or in banks;
(ii) insurance policies and rights and claims thereunder;
(iii) all claims, rights and interest in and to any
refunds for Federal, state or local income or other taxes or fees of any nature
whatsoever for
2
<PAGE>
periods prior to the Closing Date, including without limitation, fees paid to
the United States Copyright Office; and
(iv) assets disposed of in the normal course of business or with
the written consent of Buyer between the date hereof and the Closing Date.
3. Purchase Price. Subject to the adjustments to be made in
--------------
accordance with Paragraph 4 hereof, the total purchase price for the Assets
shall be One Hundred Seventy-One Million Two Hundred Thirteen Thousand Six
Hundred Sixty Seven Dollars ($171,213,667.00) (the "Purchase Price"), which
Purchase Price represents the average of three separate independent appraisals
of the System. The Purchase Price shall by payable to Seller at Closing in
cash, by cashier's check or by wire transfer of Federal funds to a bank or banks
designated by Seller.
4. Adjustments. All adjustments provided for herein with respect to
-----------
this transaction shall increase or decrease the Purchase Price, as appropriate,
and shall be made as of the close of business (5:01 p.m., local time) on the
Closing Date.
(a) Rent, pole rents, franchise fees, taxes, power and utility
fees and deposits, insurance premiums, licenses, customer prepayments and
deposits, and other prepayments and amounts due shall be prorated and debited or
credited to Seller or Buyer, as applicable. For purposes of adjustments made
under this Paragraph 4(a), the subscriber accounts receivable which are due and
payable for and with respect to the month in which the Closing takes place shall
be prorated as of the Closing Date.
(b) The Purchase Price shall be reduced by any accounts
payable, accrued expenses and vehicle lease obligations for which Seller would
otherwise be liable hereunder, but for which the obligation for payment is
assumed by Buyer.
(c) Seller and Buyer shall jointly determine the adjustments
required by this Paragraph 4 at the Closing. The net amount to which Buyer or
Seller, as the case may be, is entitled pursuant hereto shall be thereupon paid
by Buyer or Seller, as the case may be, by an adjustment to the Purchase Price.
All adjustments made at Closing shall be tentative and shall be subject to final
adjustment within 90 days after Closing.
5. Assumption of Liabilities. Buyer shall agree to assume and
-------------------------
discharge all debts, liabilities and obligations of Seller arising with respect
to periods subsequent to the Closing Date under any franchise, license, permit,
lease, instrument or agreement transferred to Buyer hereunder and, with respect
to periods prior to and including the Closing Date, to assume and discharge all
obligations of Seller to the extent that the Purchase Price is reduced pursuant
to Paragraph 4(b) hereof. Buyer hereby agrees to indemnify and to hold harmless
from and against any and all damages, costs, claims and expenses arising by
reason of the ownership, operation or control of
3
<PAGE>
the System after Closing Date. Anything herein to the contrary notwithstanding,
there is hereby excluded from the assumed obligations, and Seller hereby agrees
to retain and discharge, and to indemnify and hold Buyer harmless from and
against, any and all damages, costs, claims and expenses to the extent they
arise out of any debt, liability or obligation arising with respect to periods
prior to the Closing Date for which no reduction of the Purchase Price has been
made pursuant to Paragraph 4(b) hereof, and any debt, liability or obligation of
Seller not expressly assumed hereunder, whenever arising.
6. Seller's Representations. Seller hereby represents, warrants,
covenants and agrees, that:
(a) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Colorado. Seller
has all requisite partnership power and authority to own and operate its
properties and to carry on its business as now and where being conducted.
(b) All necessary consents and approvals have been obtained by
Seller for the execution and delivery of this Agreement. The execution and
delivery of this Agreement by Seller has been duly and validly authorized and
approved by all necessary action of Seller. This Agreement is a valid and
binding obligation of Seller, enforceable against it in accordance with its
terms.
(c) Subject to the receipt of any required consents, Seller
has full legal power, right and authority to sell and convey to Buyer legal and
beneficial title to the Assets and Seller's sale to Buyer shall transfer good
and marketable title thereto, free and clear of all security interests, liens,
pledges, charges and encumbrances of every kind.
(d) The execution, delivery and performance of this Agreement
by Seller will not violate any provisions of law and will not, with or without
the giving of notice or the passage of time, conflict with or result in any
breach of any of the terms or conditions of, or constitute a default under, any
mortgage, agreement or other instrument to which Seller is a party or by which
Seller, the Assets or the System are bound. The execution, delivery and
performance of this Agreement will not result in the creation of any security
interest, lien, pledge, charge or encumbrance upon the Assets or the Systems.
7. Conditions Precedent to Buyer's Obligations. The obligations of
-------------------------------------------
Buyer under this Agreement with respect to the purchase and sale of the Assets
shall be subject to the fulfillment on or prior to the Closing Date of each of
the following conditions:
(a) All of the representations and warranties by Seller
contained in this Agreement shall be true and correct in all material respects
at and as
4
<PAGE>
of the Closing Date. Seller shall have complied with and performed all
of the agreements, covenants and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
(b) Seller shall have delivered to Buyer such instruments,
consents and approvals of third parties as are necessary to transfer the Assets
to Buyer pursuant to this Agreement.
(c) The statutory waiting period applicable to this Agreement
and the transactions contemplated hereby under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have been terminated
or shall have expired.
8. Conditions Precedent to Seller's Obligation. The obligations of
-------------------------------------------
Seller under this Agreement with respect to the purchase and sale of the Assets
shall be subject to the fulfillment on or prior to the Closing Date of each of
the following conditions:
(a) The statutory waiting period applicable to this Agreement
and the transactions contemplated hereby under the HSR Act, shall have been
terminated or shall have expired.
(b) Buyer shall have delivered the Purchase Price to Seller in
accordance with Paragraph 3 hereof.
9. Closing. The closing hereunder (the "Closing") shall be held in
-------
the offices of Seller, 9697 East Mineral Avenue, Englewood, Colorado, 80112, on
such date or dates as the parties hereto shall mutually agree. At the Closing,
all cash, checks, notes, deeds, bills of sale, certificates of title,
assignments and other instruments and documents referred to or contemplated by
this Agreement shall be exchanged by the parties hereto.
10. Brokerage. Seller represents and warrants to Buyer that Seller
---------
will be solely responsible for, and pay in full, any and all brokerage or
finder's fees or agent's commissions or other like payment owing in connection
with Seller's use of any broker, finder or agent in connection with this
Agreement or the transactions contemplated hereby. Buyer represents and
warrants to Seller that Buyer will be solely responsible for, and pay in full,
any and all brokerage or finder's fees or agent's commission or other like
payment owing in connection with Buyer's use of any broker, finder or agent in
connection with this Agreement or the transaction contemplated hereby. Each
party hereto agrees to indemnify and hold the other party hereto harmless
against and in respect of any breach by it of the provision of this Paragraph
10.
5
<PAGE>
11. Miscellaneous.
-------------
(a) Buyer shall have the right, upon notice to Seller, to
assign prior to the Closing Date, in whole or in part, its rights and
obligations hereunder to any affiliate of Buyer, including any public limited
partnership or partnerships of which Buyer or any affiliate of Buyer is a
general partner or any joint venture or general partnership of which Buyer, or
any affiliate of Buyer, or any of such public limited partnership or
partnerships is a constituent partner, or to any subsidiary of Buyer or other
entity controlled by, controlling or under common control with Buyer, or,
subject to Seller's consent, to any other entity.
(b) From time to time after the Closing Date, Seller shall, if
requested by Buyer, make, execute and deliver to Buyer such additional
assignments, bills of sale, deeds and other instruments of transfer, as may be
necessary or proper to transfer to Buyer all of Seller's right, title and
interest in and to the assets covered by this Agreement. Such efforts and
assistance shall be without cost to Buyer.
(c) This Agreement embodies the entire understanding and
agreement among the parties concerning the subject matter hereof and supersedes
any and all prior negotiations, understandings or agreements in regard thereto.
This Agreement shall be interpreted, governed and construed in accordance with
the laws of the State of Colorado. This Agreement may not be modified or amended
except by an agreement in writing executed by both Buyer and Seller.
(d) Any sales, use, transfer or documentary taxes imposed in
connection with the sale and deliver of the Assets and the rights acquired by
Buyer under this Agreement shall be paid by Buyer.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
day and year first above written.
SELLER:
-------
JONES INTERCABLE INVESTORS, L.P.,
a Colorado limited partnership
By: Jones Intercable, Inc., a
Colorado corporation,
as its general partner
By: /s/ Elizabeth M. Steele
-----------------------
Title: Vice President
-----------------------
6
<PAGE>
BUYER:
------
JONES INTERCABLE, INC.,
a Colorado corporation
By: /s/ Kevin P. Coyle
----------------------------
Title: Group Vice President/Finance
----------------------------
7
<PAGE>
EXHIBIT 2.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement"), dated as of
April 15, 1997, is made and entered into by and between Jones Intercable, Inc.,
a Colorado corporation ("JIC") and Jones Communications of Missouri, Inc., a
Colorado corporation ("JCM").
Recitals
--------
A. Jones is party to that certain Asset Purchase Agreement dated as
of February 28, 1997 (the "Purchase Agreement") with Jones Intercable Investors,
L.P. (the "MLP"), pursuant to which JIC has agreed to buy, and the MLP has
agreed to sell, substantially all of the assets relating to the cable television
system owned by the MLP serving the communities in and around Independence,
Missouri and Olathe, Kansas.
B. In March 1997, JIC orally agreed to assign its rights and duties
under the Purchase Agreement to JCM, and JCM orally agreed to accept such
assignment.
C. JIC and JCM desire to formalize the aforementioned assignment and
assumption by a written agreement.
D. All capitalized terms used in this Agreement and not otherwise
defined shall have the meanings given to them in the Purchase Agreement.
Agreements
----------
In consideration of the mutual promises and covenants hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, JIC and JCM hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions of
-------------------------
this Agreement: (a) JIC hereby assigns, conveys and transfers to JCM all of its
right, title and interest as Buyer under the Purchase Agreement, including but
not limited to, the right to purchase the Assets of the System and (b) JCM
hereby assumes and shall pay, discharge and perform all of the obligations and
duties of Buyer under the Purchase Agreement.
<PAGE>
2. Further Assurances. JIC and JCM shall execute and deliver such
------------------
further instruments as may be reasonably necessary to carry out the terms of
this Agreement.
3. Governing Law. The validity, performance and enforcement of this
-------------
Agreement shall be governed by the internal laws of the State of Colorado,
without giving effect to the principles of conflicts of law of such State.
The parties have executed this Agreement as of the date first written
above.
JONES INTERCABLE, INC.
By /s/ Elizabeth M. Steele
-----------------------
Title Vice President
-----------------------
JONES COMMUNICATIONS OF
MISSOURI, INC.
By /s/ Elizabeth M. Steele
-----------------------
Title Vice President
-----------------------
2
<PAGE>
EXHIBIT 2.3
PURCHASE AND SALE AGREEMENT
---------------------------
THIS PURCHASE AND SALE AGREEMENT is made as of the 28th day of July, 1997,
by and between CABLE TV FUND 12-BCD VENTURE, a Colorado joint venture ("Seller")
and JONES INTERCABLE, INC., a Colorado corporation ("Buyer").
RECITALS
- --------
A. Seller owns and operates a cable television system in and around the
City of Albuquerque, the Town of Bernalillo, the Villages of Bosque Farms,
Corrales, and Los Ranchos de Albuquerque, Kirtland Air Force Base and the
Counties of Bernalillo, Sandoval and Valencia, all located in the State of New
Mexico (the "System").
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the System upon the terms and conditions set forth in this Agreement.
AGREEMENT
- ---------
In consideration of the mutual promises contained in this Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Purchase and Sale. Subject to the terms and conditions set forth in
-----------------
this Agreement, Seller hereby agrees to sell, convey, assign, transfer and
deliver to Buyer, and Buyer hereby agrees to purchase from Seller, on the
Closing Date (as defined in Paragraph 9 hereof), all of Seller's right, title
and interest in and to the System and the Assets (as defined in Paragraph 2
hereof) then being transferred and sold pursuant hereto, free and clear of all
security interests, liens, pledges, charges and encumbrances.
2. Assets. (a) The assets to be conveyed to Buyer hereunder shall consist
------
of all of the assets and properties of Seller, whether real, personal, tangible
or intangible, of whatever description and wherever located, now owned or used
by Seller solely in connection with Seller's ownership or operation of the
System, except those items excluded pursuant to subparagraph 2(b) hereof, but
<PAGE>
including all additions made to the Closing Date, to the end that all of
Seller's assets owned on the Closing Date which are used or owned solely in
connection with Seller's ownership or operation of the System shall pass to
Buyer. Such assets (collectively, the "Assets") shall include, without
limitation:
(i) all of Seller's towers, tower equipment, antennas, aboveground and
underground cable, distribution systems, headend amplifiers, line amplifiers,
earth satellite receive stations and related equipment, microwave equipment,
testing equipment, motor vehicles, office equipment, furniture and fixtures,
supplies, inventory and other physical assets owned or used by Seller solely in
connection with Seller's ownership or operation of the System;
(ii) the franchises, leases, agreements, permits, consents, licenses and
other contracts, pole line or joint pole agreements, underground conduit
agreements, agreements for the reception or transmission of signals by
microwave, easements, rights-of-way and construction permits, if any, and any
other obligations and agreements between Seller and suppliers and customers,
which are owned or used by Seller solely in connection with Seller's ownership
and operation of the System;
(iii) the real property owned and used solely in connection with the
System;
(iv) all accounts receivable of Seller arising in connection with the
System;
(v) all engineering records, files, data, drawings, blueprints,
schematics, maps, reports, lists and plans and processes owned or developed by
or for Seller and intended for use in connection with the System;
(vi) all promotional graphics, original art work, mats, plates, negatives
and other advertising, or related materials developed by or for Seller and
intended for use in connection with the System;
(vii) all of Seller's correspondence files, lists, records and reports
concerning customers and prospective customers of the Systems, concerning
television stations whose transmissions are or may be carried as part of the
Systems and concerning all dealings with federal, state, and local regulatory
agencies, including all reports filed by or on behalf of Seller with the
Federal Communications Commission (the "FCC") in connection with the System and
any
2
<PAGE>
Statements of Account of the System filed by or on behalf of Seller with the
united States Copyright Office in connection with the System; provided however,
-----------------
that Seller shall not transfer to Buyer the licenses and agreements for which
the consent of a third party is required to transfer (the "Additional
Agreements") until Seller has obtained the approval of the parties granting the
Additional Agreements to such transfer, whereupon such Additional Agreements
shall be deemed to be included in the assets to be transferred to Buyer pursuant
to this Agreement.
(b) The following properties and assets relating to the System and its
business operations shall be retained by Seller and shall not be sold, assigned
or transferred to Buyer;
(i) cash or cash equivalents on hand or in banks;
(ii) insurance policies and rights and claims thereunder;
(iii) all claims, rights and interest in and to any refunds for
Federal, state or local income or other taxes or fees of any nature whatsoever
for periods prior to the Closing Date, including without limitation, fees paid
to the United States Copyright Office; and
(iv) assets disposed of in the normal course of business or with the
written consent of Buyer between the date hereof and the Closing Date.
3. Purchase Price. Subject to the adjustments to be made in accordance
--------------
with Paragraph 4 hereof, the total purchase price for the Assets shall be Two
Hundred Twenty-Two Million Nine Hundred Sixty-Three Thousand Two Hundred Sixty
Seven Dollars ($222,963,267.00) (the "Purchase Price"), which Purchase Price
represents the average of three separate independent appraisals of the System.
The Purchase Price shall by payable to Seller at Closing in cash, by cashier's
check or by wire transfer of Federal funds to a bank or banks designated by
Seller.
4. Adjustments. All adjustments provided for herein with respect to this
-----------
transaction shall increase or decrease the Purchase Price, as appropriate, and
shall be made as of the close of business (5:01 p.m., local time) on the Closing
Date.
(a) Rent, pole rents, franchise fees, taxes, power and utility fees and
deposits, insurance premiums, licenses, customer prepayments
3
<PAGE>
and deposits, and other prepayments and amounts due shall be prorated and
debited or credited to Seller or Buyer, as applicable. For purposes of
adjustments made under this Paragraph 4(a), the subscriber accounts receivable
which are due and payable for and with respect to the month in which the Closing
takes place shall be prorated as of the Closing Date.
(b) The Purchase Price shall be reduced by any accounts payable,
accrued expenses and vehicle lease obligations for which Seller would otherwise
be liable hereunder, but for which the obligation for payment is assumed by
Buyer.
(c) Seller and Buyer shall jointly determine the adjustments required
by this Paragraph 4 at the Closing. The net amount to which Buyer or Seller, as
the case may be, is entitled pursuant hereto shall be thereupon paid by Buyer or
Seller, as the case may be, by an adjustment to the Purchase Price. All
adjustments made at Closing shall be tentative and shall be subject to final
adjustment within 90 days after Closing.
5. Assumption of Liabilities. Buyer shall agree to assume and discharge
-------------------------
all debts, liabilities and obligations of Seller arising with respect to periods
subsequent to the Closing Date under any franchise, license, permit, lease,
instrument or agreement transferred to Buyer hereunder and, with respect to
periods prior to and including the Closing Date, to assume and discharge all
obligations of Seller to the extent that the Purchase Price is reduced pursuant
to Paragraph 4(b) hereof; provided, however, that Buyer shall not assume the
-------- -------
Additional Agreements until Seller has obtained the approval of the parties
granting the Additional Agreements to Seller's transfer of the Additional
Agreements to Buyer, whereupon the Additional Agreements shall be deemed to be
included in the assets to be assumed by Buyer hereunder. Buyer hereby agrees to
indemnify and to hold harmless from and against any and all damages, costs,
claims and expenses (the "Indemnifiable Claims") arising by reason of the
ownership, operation or control of the System after Closing Date; provided,
--------
however, that Buyer shall not indemnify and hold harmless Seller from any
- -------
Indemnifiable Claims arising under Additional Agreements as a result of actions
relating to any period before Seller has obtained the approval of the parties
granting the Additional Agreements to Seller's transfer of the Additional
Agreements to Buyer. Anything herein to the contrary notwithstanding, there is
hereby excluded from the assumed obligations, and Seller hereby agrees to retain
and discharge, and to indemnify and hold Buyer harmless from and against, any
and all Indemnifiable Claims to the extent they arise (a) out of any debt,
liability
4
<PAGE>
or obligation arising with respect to periods prior to the Closing Date for
which no reduction of the Purchase Price has been made pursuant to Paragraph
4(b) hereof, (b) out of any debt, liability or obligation arising under the
Additional Agreements arising as a result of actions relating to any period
before Seller has obtained the approval of the parties granting the Additional
Agreements to Seller's transfer of the Additional Agreements to Buyer, and (c)
any debt, liability or obligation of Seller not expressly assumed hereunder,
whenever arising.
6. Seller's Representations. Seller hereby represents, warrants,
------------------------
covenants and agrees, that:
(a) Seller is a joint venture duly organized and validly existing under
the laws of the State of Colorado. Seller has all requisite partnership power
and authority to own and operate its properties and to carry on its business as
now and where being conducted.
(b) All necessary consents and approvals have been obtained by Seller
for the execution and delivery of this Agreement. The execution and delivery of
this Agreement by Seller has been duly and validly authorized and approved by
all necessary action of Seller. This Agreement is a valid and binding obligation
of Seller, enforceable against it in accordance with its terms.
(c) Subject to the receipt of any required consents, Seller has full
legal power, right and authority to sell and convey to Buyer legal and
beneficial title to the Assets and Seller's sale to Buyer shall transfer good
and marketable title thereto, free and clear of all security interests, liens,
pledges, charges and encumbrances of every kind.
(d) The execution, delivery and performance of this Agreement by Seller
will not violate any provisions of law and will not, with or without the giving
of notice or the passage of time, conflict with or result in any breach of any
of the terms or conditions of, or constitute a default under, any mortgage,
agreement or other instrument to which Seller is a party or by which Seller, the
Assets or the System are bound. The execution, delivery and performance of this
Agreement will not result in the creation of any security interest, lien,
pledge, charge or encumbrance upon the Assets or the Systems.
7. Conditions Precedent to Buyer's Obligations. The obligations of Buyer
-------------------------------------------
under this Agreement with respect to the purchase and sale
5
<PAGE>
of the Assets shall be subject to the fulfillment on or prior to the Closing
Date of each of the following conditions:
(a) All of the representations and warranties by Seller contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date. Seller shall have complied with and performed all of the
agreements, covenants and conditions required by this Agreement to be performed
or complied with by it on or prior to the Closing Date.
(b) Seller shall have delivered to Buyer such instruments, consents and
approvals of third parties as are necessary to transfer the Assets to Buyer
pursuant to this Agreement.
(c) The statutory waiting period applicable to this Agreement and the
transactions contemplated hereby under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall have been terminated
or shall have expired.
8. Conditions Precedent to Seller's Obligation. The obligations of Seller
-------------------------------------------
under this Agreement with respect to the purchase and sale of the Assets shall
be subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
(a) The statutory waiting period applicable to this Agreement and the
transactions contemplated hereby under the HSR Act, shall have been terminated
or shall have expired.
(b) The limited partners of the joint venturers of Seller shall have
approved the transactions contemplated by this Agreement.
(c) Buyer shall have delivered the Purchase Price to Seller in
accordance with Paragraph 3 hereof.
9. Closing. The closing hereunder (the "Closing") shall be held in the
-------
offices of Seller, 9697 East Mineral Avenue, Englewood, Colorado, 80112, on such
date or dates as the parties hereto shall mutually agree. At the Closing, all
cash, checks, notes, deeds, bills of sale, certificates of title, assignments
and other instruments and documents referred to or contemplated by this
Agreement shall be exchanged by the parties hereto.
6
<PAGE>
10. Brokerage. Seller represents and warrants to Buyer that Seller will
---------
be solely responsible for, and pay in full, any and all brokerage or finder's
fees or agent's commissions or other like payment owing in connection with
Seller's use of any broker, finder or agent in connection with this Agreement or
the transactions contemplated hereby. Buyer represents and warrants to Seller
that Buyer will be solely responsible for, and pay in full, any and all
brokerage or finder's fees or agent's commission or other like payment owing in
connection with Buyer's use of any broker, finder or agent in connection with
this Agreement or the transaction contemplated hereby. Each party hereto agrees
to indemnify and hold the other party hereto harmless against and in respect of
any breach by it of the provision of this Paragraph 10.
11. Miscellaneous.
--------------
(a) Buyer shall have the right, upon notice to Seller, to assign prior
to the Closing Date, in whole or in part, its rights and obligations hereunder
to any affiliate of Buyer, including any public limited partnership or
partnerships of which Buyer or any affiliate of Buyer is a general partner or
any joint venture or general partnership of which Buyer, or any affiliate of
Buyer, or any of such public limited partnership or partnerships is a
constituent partner, or to any subsidiary of Buyer or other entity controlled
by, controlling or under common control with Buyer, or, subject to Seller's
consent, to any other entity.
(b) From time to time after the Closing Date, Seller shall, if
requested by Buyer, make, execute and deliver to Buyer such additional
assignments, bills of sale, deeds and other instruments of transfer, as may be
necessary or proper to transfer to Buyer all of Seller's right, title and
interest in and to the assets covered by this Agreement. Such efforts and
assistance shall be without cost to Buyer.
(c) This Agreement embodies the entire understanding and agreement
among the parties concerning the subject matter hereof and supersedes any and
all prior negotiations, understandings or agreements in regard thereto. This
Agreement shall be interpreted, governed and construed in accordance with the
laws of the State of Colorado. This Agreement may not be modified or amended
except by an agreement in writing executed by both Buyer and Seller.
7
<PAGE>
(d) Any sales, use, transfer or documentary taxes imposed in connection
with the sale and deliver of the Assets and the rights acquired by Buyer under
this Agreement shall be paid by Buyer.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.
SELLER:
-------
CABLE TV FUND 12-BCD VENTURE,
a Colorado joint venture
By: Cable TV Fund 12-B, Ltd., a Colorado limited
partnership, as a Venturer
By: Cable TV Fund 12-C, Ltd., a Colorado limited
partnership, as a Venturer
By: Cable TV Fund 12-D, Ltd., a Colorado limited
partnership, as a Venturer
By: Jones Intercable, Inc., a Colorado
corporation, as their General Partner
By: /s/ Elizabeth M. Steele
-----------------------
Title: Vice President
--------------
BUYER:
------
JONES INTERCABLE, INC.,
a Colorado corporation
By: /s/ Kevin P. Coyle
------------------
Title: Group Vice President/Finance
----------------------------
8
