<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
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Commission File Number: 0-14689
JONES CABLE INCOME FUND 1-A, LTD.
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Exact name of registrant as specified in charter
Colorado 84-1010416
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State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, Englewood, Colorado 80112
Address of principal executive office
(303) 792-3111
Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during
the preceding l2 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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JONES CABLE INCOME FUND 1-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1995 1994
------ ------------ --------------
<S> <C> <C>
CASH $ 1,998 $ 78,286
TRADE RECEIVABLES, less allowance for doubtful
receivables of $3,997 and $748 at June 30, 1995
and December 31, 1994, respectively 52,883 70,273
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 9,884,923 9,561,181
Less- accumulated depreciation (5,648,169) (5,291,706)
------------ ------------
4,236,754 4,269,475
Franchise costs, net of accumulated amortization
of $578,343 and $545,913 at June 30, 1995
and December 31, 1994, respectively 148,657 181,087
Costs in excess of interests in net assets
purchased, net of accumulated amortization
of $41,086 and $38,782 at June 30, 1995
and December 31, 1994, respectively 142,914 145,218
------------ ------------
Total investment in cable television properties 4,528,325 4,595,780
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 20,064 10,906
------------ ------------
Total assets $ 4,603,270 $ 4,755,245
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these balance sheets.
2
<PAGE> 3
JONES CABLE INCOME FUND 1-A, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------ ------------
<S> <C> <C>
LIABILITIES:
Debt $ 3,583,157 $ 3,584,706
Accounts payable-
Trade 18,033 7,285
General Partner 776,291 483,487
Accrued liabilities 222,771 262,401
Accrued distribution to limited partners 200,000 235,000
Subscriber prepayments 48,062 54,895
------------ ------------
Total liabilities 4,848,314 4,627,774
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (5,581) (5,896)
Distributions (70,189) (66,149)
------------ ------------
(74,770) (71,045)
------------ ------------
Limited Partners-
Net contributed capital (17,000 units outstanding
at June 30, 1995 and December 31, 1994) 7,288,694 7,288,694
Accumulated deficit (509,968) (541,178)
Distributions (6,949,000) (6,549,000)
------------ ------------
(170,274) 198,516
------------ ------------
Total liabilities and partners'
capital (deficit) $ 4,603,270 $ 4,755,245
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these balance sheets.
3
<PAGE> 4
JONES CABLE INCOME FUND 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES $ 1,146,939 $ 1,091,799 $ 2,250,229 $ 2,159,382
COSTS AND EXPENSES:
Operating expense 682,001 636,108 1,377,937 1,273,384
Management fees and
allocated overhead from
General Partner 137,428 141,865 282,880 286,725
Depreciation and
amortization 195,492 210,182 391,195 432,328
------------ ------------ ------------ ------------
OPERATING INCOME 132,018 103,644 198,217 166,945
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (85,500) (48,529) (167,017) (86,024)
Other, net 129 (6,435) 325 (6,215)
------------ ------------ ------------ ------------
Total other expense, net (85,371) (54,964) (166,692) (92,239)
------------ ------------ ------------ ------------
NET INCOME $ 46,647 $ 48,680 $ 31,525 $ 74,706
============ ============ ============ ============
ALLOCATION OF NET INCOME:
General Partner $ 466 $ 487 $ 315 $ 747
============ ============ ============ ============
Limited Partners $ 46,181 $ 48,193 $ 31,210 $ 73,959
============ ============ ============ ============
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 2.72 $ 2.83 $ 1.84 $ 4.35
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 17,000 17,000 17,000 17,000
============ ============ ============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these statements.
4
<PAGE> 5
JONES CABLE INCOME FUND 1-A, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 31,525 $ 74,706
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 391,195 432,328
Decrease in trade receivables 17,390 18,358
Increase in deposits, prepaid expenses and
deferred charges (9,158) (3,072)
Increase (decrease) in trade accounts payable,
accrued liabilities and subscriber prepayments (39,753) 51,994
Increase (decrease) in advances from General Partner 292,804 (20,529)
--------- ---------
Net cash provided by operating activities 684,003 553,785
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (323,742) (271,161)
--------- ---------
Net cash used in investing activities (323,742) (271,161)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 18,435 250,000
Repayment of debt (19,984) (17,013)
Decrease in accrued distributions to limited partners (35,000) --
Cash flow distributions to limited partners (400,000) (495,000)
--------- ---------
Net cash used in financing activities (436,549) (262,013)
--------- ---------
Increase (decrease) in cash (76,288) 20,611
Cash, beginning of period 78,286 61,322
--------- ---------
Cash, end of period $ 1,998 $ 81,933
========= =========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 166,785 $ 93,105
========= =========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these statements.
5
<PAGE> 6
JONES CABLE INCOME FUND 1-A, LTD.
(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 Cable Income Fund 1-A, Ltd. ("the
Partnership") at June 30, 1995 and December 31, 1994 and its Statements of
Operations for the three and six month periods ended June 30, 1995 and 1994 and
its Statements of Cash Flows for the six month periods ended June 30, 1995 and
1994. 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 systems serving
certain areas in and around Owatonna and Glencoe, Minnesota (the
"Owatonna/Glencoe System") and Milwaukie, Oregon (the "Milwaukie System").
(2) Jones Intercable, Inc. (the "General Partner"), a publicly held Colorado
corporation, manages the Partnership and receives a fee for its services equal
to five 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, 1995 were $57,348 and $112,512,
respectively, as compared to $54,590 and $107,969, respectively, for the similar
1994 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent 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 Partnership. 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 Jones
Intercable, Inc. 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 allocated
to the Partnership by the General Partner for allocated overhead and
administrative expenses for the three and six month periods ended June 30, 1995
were $91,243 and $181,531, respectively, as compared to $87,275 and $178,756,
respectively, for the similar 1994 periods.
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<PAGE> 7
JONES CABLE INCOME FUND 1-A
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
During the first six months of 1995, the Partnership expended
approximately $343,000 in capital improvements. Approximately 20 percent related
to service drops to subscribers' homes, approximately 19 percent related to the
purchase of converters and approximately 12 percent of these expenditures
related to the upgrade of equipment within the Partnership's systems. The
remainder of the expenditures were for various enhancements in the Partnership's
systems. These expenditures were funded by cash generated from operations and
advances from the General Partner. Anticipated capital expenditures for the
remainder of 1995 are approximately $309,000. Of these expenditures,
approximately 28 percent relates to service drops and approximately 14 percent
relates to the purchase of converters. The remainder of the expenditures are for
various enhancements in the Partnership's systems. Funding for these
expenditures is expected to be provided by cash generated from operations and
borrowings under a new revolving credit facility.
On September 28, 1992, the Partnership entered into a $3,500,000
revolving credit facility. The revolving credit period expired March 31, 1995,
at which time the outstanding balance converted to a term loan with a final
maturity of June 30, 1999. The balance outstanding on the Partnership's credit
facility at June 30, 1995 was the maximum of $3,500,000. The General Partner
renegotiated the Partnership's credit facility on July 21, 1995 increasing the
maximum amount available to $6,500,000, which was used to repay the $3,500,000
outstanding under the previous credit facility, and $776,291 in advances from
the General Partner, and the balance will be available to fund capital
expenditures. The renegotiated credit facility is a revolver that converts to a
term loan on December 31, 1997, with a final maturity of December 31, 2003.
Interest on outstanding principal amounts on the renegotiated credit facility
is computed at the Partnership's option of London Interbank Offered Rate plus
1-1/4 percent or the Prime rate plus 1/4 percent. The effective interest rates
on amounts outstanding as of June 30, 1995 and 1994 were 7.00 percent and 5.75
percent, respectively.
A primary objective of the Partnership is to provide quarterly cash
distributions from operating cash flow to the limited partners. The Partnership
declared a $200,000 distribution, or approximately $235 per $10,000 invested, to
the limited partners during the second quarter of 1995, which was principally
from second quarter operating cash flow of the Partnership. Future distributions
will be announced on a quarter-by-quarter basis. The payment of quarterly
operating cash flow distributions may reduce the financial flexibility of the
Partnership.
The General Partner presently believes that the Partnership has
sufficient sources of capital available from cash generated from operations, and
borrowings under the new credit facility to meet its presently anticipated
needs.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $55,140, or approximately 5
percent, to $1,146,939 for the three months ended June 30, 1995 from $1,091,799
for the similar period in 1994. For the six month periods ended June 30, 1995
and 1994, revenues increased $90,847, or approximately 4 percent, to $2,250,229
at June 30, 1995 from $2,159,382 for the similar period in 1994. These increases
in revenues were primarily due to increases in the number of basic subscribers.
Since June 30, 1994, the Partnership's cable system added 572 basic subscribers,
increasing to 13,043 basic subscribers at June 30, 1995 from 12,471 for the
similar period in 1994. No other individual factor significantly affected the
increases in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses increased $45,893, or approximately 7 percent, to
$682,001 for the three month period ended June 30, 1995 from $636,108 for the
similar 1994 period. Operating expenses increased $104,553, or approximately 8
percent, to $1,377,937 for the six month period ended June 30, 1995 from
$1,273,384 for the similar 1994 period. These
7
<PAGE> 8
increases were primarily due to increases in programming costs, which increased
approximately 14 percent to the three and six month periods ended June 30, 1995.
Operating expense represented 59 and 58 percent of revenue for the three month
periods ended June 30, 1995 and 1994, respectively, and represented 61 percent
and 59 percent for the six month periods ended June 30, 1995 and 1994,
respectively. No other individual factor contributed significantly to the
increases in operating expenses.
Management fees and allocated overhead from the General Partner
decreased $4,437, or approximately 3 percent, to $137,428 for the three month
period ended June 30, 1995 from $141,865 for the similar 1994 period. Management
fees and allocated overhead from the General Partner decreased $3,845, or
approximately 1 percent, to $282,880 for the six months ended June 30, 1995 from
$286,725 for the similar 1994 period. These decreases are due to a decrease in
allocated expenses from the General Partner.
Depreciation and amortization expense decreased $14,690, or
approximately 7 percent, to $195,492 for the three months ended June 30, 1995
from $210,182 for the similar 1994 period. Depreciation and amortization expense
decreased $41,133, or approximately 10 percent, to $391,195 for the six months
ended June 30, 1995 from $432,328 for the similar 1994 period. These decreases
were due to the maturation of the Partnership's intangible asset base.
Operating income increased $28,374, or approximately 27 percent, to
$132,018 for the three months ended June 30, 1995 from $103,644 for the similar
1994 period. Operating income increased $31,272, or approximately 19 percent, to
$198,217 for the six months ended June 30, 1995 from $166,945 for the similar
1994 period. These increases were due to the increases in revenues exceeding the
increases in operating expenses. Operating income before depreciation and
amortization increased $13,684, or approximately 4 percent, to $327,510 for the
three months ended June 30, 1995 from $313,826 for the similar 1994 period. This
increase was due to the increases in revenues exceeding the increase in
operating expenses. Operating income before depreciation and amortization
decreased $9,861, or approximately 2 percent, to $589,412 for the six months
ended June 30, 1995 from $599,273 for the similar 1994 period. The decrease was
due to the increase in operating expenses exceeding the increase in revenues.
Interest expense increased $36,971, or approximately 76 percent, to
$85,500 for the three months ended June 30, 1995 from $48,529 for the similar
1994 period. Interest expense increased $80,993, or approximately 94 percent, to
$167,017 for the six month period ended June 30, 1995 from $86,024 for the
similar 1994 period. These increases were due to higher interest rates and
higher outstanding balances on interest bearing obligations.
Net income decreased $2,033, or approximately 4 percent, to $46,647 for
the three month period ended June 30, 1995 from $48,680 for the similar 1994
period, due primarily to the increase in interest expense exceeding the increase
in operating income. Net income decreased $43,181, or approximately 58 percent,
to $31,525 for the six month period ended June 30, 1995 from $74,706 for the
similar 1994 period. This decrease was primarily due to the increase in interest
expense exceeding the increase in operating income.
8
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Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES CABLE INCOME FUND 1-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /s/ Kevin P. Coyle
------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 14, 1995
10
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EXHIBIT INDEX
Exhibit No. Exhibit Description Page
----------- ------------------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,998
<SECURITIES> 0
<RECEIVABLES> 56,880
<ALLOWANCES> (3,997)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9,884,923
<DEPRECIATION> (5,648,169)
<TOTAL-ASSETS> 4,603,270
<CURRENT-LIABILITIES> 1,265,157
<BONDS> 3,583,157
<COMMON> 0
0
0
<OTHER-SE> (245,044)
<TOTAL-LIABILITY-AND-EQUITY> 4,603,270
<SALES> 0
<TOTAL-REVENUES> 2,250,229
<CGS> 0
<TOTAL-COSTS> 2,052,012
<OTHER-EXPENSES> (325)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 167,017
<INCOME-PRETAX> 31,525
<INCOME-TAX> 0
<INCOME-CONTINUING> 31,525
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,525
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
</TABLE>
