<PAGE>
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, 1998
-------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to _________
Commission File Number: 0-14689
JONES CABLE INCOME FUND 1-A, LTD.
- ------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010416
- ------------------------------------------------------------------------------
State of organization I.R.S. employer I.D. #
9697 East Mineral Avenue, Englewood, Colorado 80112
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Address of principal executive office
(303) 792-3111
---------------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 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
----- -----
<PAGE>
JONES CABLE INCOME FUND 1-A, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June30, December 31,
ASSETS 1998 1997
------ ------------ -------------
<S> <C> <C>
CASH $ 733,454 $ 788,679
TRADE RECEIVABLES, less allowance for doubtful
receivables of $9,475 and $5,628 at June 30, 1998
and December 31, 1997, respectively 126,851 59,963
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 6,933,420 6,701,483
Less- accumulated depreciation (4,061,741) (3,778,933)
----------- -----------
2,871,679 2,922,550
Franchise costs and other intangible assets, net of
accumulated amortization of $465,431 and $465,203 at
June 30, 1998 and December 31, 1997, respectively 12,569 12,797
----------- -----------
Total investment in cable television properties 2,884,248 2,935,347
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 113,655 148,561
----------- -----------
Total assets $ 3,858,208 $ 3,932,550
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE>
JONES CABLE INCOME FUND 1-A, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL 1998 1997
--------------------------------- ------------- -------------
<S> <C> <C>
LIABILITIES:
Debt $ 3,197,419 $ 3,390,507
Trade accounts payable and accrued liabilities 298,100 204,802
Accrued distribution to limited partners - 75,000
Subscriber prepayments 20,958 31,254
------------ ------------
Total liabilities 3,516,477 3,701,563
------------ ------------
PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Accumulated earnings 163,138 162,031
Distributions (87,867) (87,867)
------------ ------------
76,271 75,164
------------ ------------
Limited Partners-
Net contributed capital
(17,000 units outstanding at
June 30, 1998 and December 31, 1997) 7,288,694 7,288,694
Accumulated earnings 6,180,766 6,071,129
Distributions (13,204,000) (13,204,000)
------------ ------------
265,460 155,823
------------ ------------
Total partner's capital 341,731 230,987
------------ ------------
Total liabilities and partners' capital $ 3,858,208 $ 3,932,550
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE>
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,
-------------------------- ------------------------
1998 1997 1998 1997
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
REVENUES $857,590 $ 798,308 $1,691,623 $1,984,743
COSTS AND EXPENSES:
Operating expenses 489,329 471,449 972,744 1,283,267
Management fees and
allocated overhead from
General Partner 102,514 107,919 196,009 243,640
Depreciation and
amortization 151,562 156,243 297,733 374,802
-------- --------- ---------- ----------
OPERATING INCOME 114,185 62,697 225,137 83,034
-------- --------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (58,364) (42,467) (116,869) (118,694)
Gain on sale of cable television
system - - - 6,684,781
Other, net (3,403) (61,730) 2,476 (62,953)
-------- --------- ---------- ----------
Total other income (expense) (61,767) (104,197) (114,393) 6,503,134
-------- --------- ---------- ----------
NET INCOME (LOSS) $ 52,418 $ (41,500) $ 110,744 $6,586,168
======== ========= ========== ==========
ALLOCATION OF NET INCOME
(LOSS):
General Partner $ 524 $ (415) $ 1,107 $ 165,986
======== ========= ========== ==========
Limited Partners $ 51,894 $ (41,085) $ 109,637 $6,420,182
======== ========= ========== ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 3.05 $ (2.42) $ 6.45 $ 377.66
======== ========= ========== ==========
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 unaudited statements.
4
<PAGE>
JONES CABLE INCOME FUND 1-A, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1998 1997
--------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 110,744 $ 6,586,168
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 297,733 374,802
Gain on sale of cable television system - (6,684,781)
Decrease (increase) in trade receivables (66,888) 73,380
Decrease (increase) in deposits, prepaid expenses and
deferred charges 20,209 (96,239)
Increase (decrease) in trade accounts payable and
accrued liabilities and subscriber prepayments 83,002 (77,961)
--------- -----------
Net cash provided by operating activities 444,800 175,369
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (231,937) (255,810)
Proceeds from sale of cable television system, net of
brokerage fee - 7,995,000
--------- -----------
Net cash provided by (used in) investing activities (231,937) 7,739,190
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 425,036
Repayment of debt (193,088) (3,419,988)
Distributions to limited partners - (4,905,000)
Decrease in accrued distributions to limited partners (75,000) -
--------- -----------
Net cash used in financing activities (268,088) (7,899,952)
--------- -----------
Increase (decrease) in cash (55,225) 14,607
Cash, beginning of period 788,679 42,929
--------- -----------
Cash, end of period $ 733,454 $ 57,536
========= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 122,565 $ 155,141
========= ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE>
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 complete 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, 1998 and December 31, 1997, its
Statements of Operations for the three and six month periods ended June 30, 1998
and 1997 and its Statements of Cash Flows for the six month periods ended June
30, 1998 and 1997. Results of operations for these periods are not necessarily
indicative of results to be expected for the full year.
The Partnership owns the cable television systems serving the communities
of Owatonna and Glencoe, Minnesota (the "Owatonna/Glencoe System").
(2) In April 1998, the Partnership entered into an asset purchase agreement
providing for the sale of the Owatonna/Glencoe System to an unaffiliated party
for a sales price of $11,750,000, subject to customary closing adjustments that
may have the effect of increasing or decreasing the sales price by a non-
material amount. Closing of the sale, which is anticipated to occur during
September or October of 1998, is subject to several conditions, including
necessary governmental and other third party consents including the waivers of
the right of first refusal to purchase the system by four franchising
authorities, and the termination or expiration of the statutory waiting period
applicable to the asset purchase agreement and the transactions contemplated
thereby under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. In addition, because the Owatonna/Glencoe System constitutes all of the
Partnership's remaining assets, the sale must be approved by a majority of the
limited partnership interests of the Partnership. Jones Intercable, Inc. (the
"General Partner") is conducting a proxy vote on this matter in the third
quarter of 1998.
Upon the consummation of the proposed sale of the Owatonna/Glencoe System,
based upon financial information as of June 30, 1998, the Partnership will pay a
brokerage fee of 2.5 percent of the sales price, or $293,750, to The Jones
Group, Ltd. ("The Jones Group"), a subsidiary of the General Partner, for acting
as a broker in this transaction, repay all of its indebtedness, including the
$3,135,000 borrowed under its term loan agreement and capital lease obligations
totaling $62,419, pay the General Partner deferred cash flow distributions
totaling $87,867, settle working capital adjustments, and deposit $600,000 into
an indemnity escrow account. The remaining net sale proceeds expected to total
$8,173,000 will be distributed to the Partnership's partners of record as of the
closing date of the sale of the Owatonna/Glencoe System. Because distributions
to be made on the sale of the Owatonna/Glencoe System together with all prior
distributions made by the Partnership will exceed the amounts originally
contributed to the Partnership by the limited partners plus the limited
partners' liquidation preference as set forth in the partnership agreement, the
General Partner will receive a general partner distribution on the sale of the
Owatonna/Glencoe System. The limited partners as a group will receive
$6,196,600 and the General Partner will receive $1,976,400 of the net sale
proceeds. This distribution will provide the Partnership's limited partners an
approximate return of $365 for each $500 limited partnership interest, or $730
for each $1,000 invested in the Partnership.
Taking into account the prior distributions to limited partners from the
Partnership's operating cash flow, from the net proceeds from the sale of the
cable television system serving the community of Milwaukie, Oregon (the
"Milwaukie System") and the anticipated distribution from the net proceeds
(excluding escrowed proceeds) from the sale of the Owatonna/Glencoe System, the
limited partners of the Partnership will have received a total return of $1,141
for each $500 limited partnership interest, or $2,282 for each $1,000 invested
in the Partnership at the time of the Partnership's liquidation and dissolution.
For a period of one year following the closing date, $600,000 of the sale
proceeds will remain in escrow as security for the Partnership's agreement to
indemnify the purchaser under the asset purchase agreement. The Partnership's
primary exposure, if any, will relate to the representations and warranties made
about the Owatonna/Glencoe System in the asset purchase agreement. Any amounts
remaining from this indemnity escrow account and not claimed by the buyer at the
end of the one-year escrow period will be returned to and distributed by the
Partnership. If the entire $600,000 escrow amount is distributed to the
partners, of which there can be no assurance, the limited partners as a group
would receive 75
6
<PAGE>
percent ($450,000) and the General Partner would receive 25 percent ($150,000)
of the net escrow proceeds, thus, the limited partners would receive $26 for
each $500 limited partnership interest, or $52 for each $1,000 invested in the
Partnership from this portion of the sale proceeds. The Partnership will
continue in existence at least until any amounts remaining from the indemnity
escrow account have been distributed. Since the Owatonna/Glencoe System
represents the only asset of the Partnership, the Partnership will be liquidated
and dissolved upon the final distribution of any amounts remaining from the
indemnity escrow account. If any disputes with respect to indemnification arise,
the Partnership would not be dissolved until such disputes were resolved, which
could result in the Partnership continuing in existence beyond 1999.
(3) The General Partner, a publicly held Colorado corporation, 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, 1998 were $42,879 and $84,581, respectively, compared to
$39,916 and $99,237, respectively, for the similar 1997 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 corporate 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
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity. Allocations of personnel costs are based 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, 1998
were $59,635 and $111,428, respectively, compared to $68,003 and $144,403,
respectively, for the similar 1997 periods.
7
<PAGE>
JONES CABLE INCOME FUND 1-A, LTD.
---------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
In April 1998, the Partnership entered into an asset purchase agreement
providing for the sale of the Owatonna/Glencoe System to an unaffiliated party
for a sales price of $11,750,000, subject to customary closing adjustments that
may have the effect of increasing or decreasing the sales price by a non-
material amount. Closing of the sale, which is anticipated to occur during
September or October of 1998, is subject to several conditions, including
necessary governmental and other third party consents including the waiver of
the right of first refusal to purchase the system by four franchising
authorities, and the termination or expiration of the statutory waiting period
applicable to the asset purchase agreement and transactions contemplated thereby
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. In
addition, because the Owatonna/Glencoe System constitutes all of the
Partnership's remaining assets, the sale must be approved by a majority of the
limited partnership interests of the Partnership. Jones Intercable, Inc. (the
"General Partner") is conducting a proxy vote on this matter in the third
quarter of 1998.
Upon the consummation of the proposed sale of the Owatonna/Glencoe System,
based upon financial information as of June 30, 1998, the Partnership will pay a
brokerage fee of 2.5 percent of the sales price, or $293,750, to The Jones
Group, Ltd. ("The Jones Group"), a subsidiary of the General Partner, for acting
as a broker in this transaction, repay all of its indebtedness, including the
$3,135,000 borrowed under its term loan agreement and capital lease obligations
totaling $62,419, pay the General Partner deferred cash flow distributions
totaling $87,867, settle working capital adjustments, and deposit $600,000 into
an indemnity escrow account. The remaining net sale proceeds expected to total
$8,173,000 will be distributed to the Partnership's partners of record as of the
closing date of the sale of the Owatonna/Glencoe System. Because distributions
to be made on the sale of the Owatonna/Glencoe System together with all prior
distributions made by the Partnership will exceed the amounts originally
contributed to the Partnership by the limited partners plus the limited
partners' liquidation preference as set forth in the partnership agreement, the
General Partner will receive a general partner distribution on the sale of the
Owatonna/Glencoe System. The limited partners as a group will receive
$6,196,600 and the General Partner will receive $1,976,400 of the net sale
proceeds. This distribution will provide the Partnership's limited partners an
approximate return of $365 for each $500 limited partnership interest, or $730
for each $1,000 invested in the Partnership.
Taking into account the prior distributions to limited partners from the
Partnership's operating cash flow, from the net proceeds from the sale of the
cable television system serving the community of Milwaukie, Oregon (the
"Milwaukie System") and the anticipated distribution from the net proceeds
(excluding escrowed proceeds) from the sale of the Owatonna/Glencoe System, the
limited partners of the Partnership will have received a total return of $1,141
for each $500 limited partnership interest, or $2,282 for each $1,000 invested
in the Partnership at the time of the Partnership's liquidation and dissolution.
For a period of one year following the closing date, $600,000 of the sale
proceeds will remain in escrow as security for the Partnership's agreement to
indemnify the purchaser under the asset purchase agreement. The Partnership's
primary exposure, if any, will relate to the representations and warranties made
about the Owatonna/Glencoe System in the asset purchase agreement. Any amounts
remaining from this indemnity escrow account and not claimed by the buyer at the
end of the one-year escrow period will be returned to and distributed by the
Partnership. If the entire $600,000 escrow amount is distributed to the
partners, of which there can be no assurance, the limited partners as a group
would receive 75 percent ($450,000) and the General Partner would receive 25
percent ($150,000) of the net escrow proceeds, thus, the limited partners would
receive $26 for each $500 limited partnership interest, or $52 for each $1,000
invested in the Partnership from this portion of the sale proceeds. The
Partnership will continue in existence at least until any amounts remaining from
the indemnity escrow account have been distributed. Since the Owatonna/Glencoe
System represents the only asset of the Partnership, the Partnership will be
liquidated and dissolved upon the final distribution of any amounts remaining
from the indemnity escrow account. If any disputes with respect to
indemnification arise, the Partnership would not be dissolved until such
disputes were resolved, which could result in the Partnership continuing in
existence beyond 1999.
8
<PAGE>
For the six months ended June 30, 1998, the Partnership generated net cash
from operating activities totaling $444,800, which is available to fund capital
expenditures and non-operating costs. During the first six months of 1998, the
Partnership expended approximately $232,000 for capital improvements in the
Owatonna/Glencoe System. Approximately 36 percent of these expenditures related
to construction of service drops to subscribers' homes. Approximately 26
percent related to the construction of new cable plant associated with new homes
passed. Approximately 17 percent related to the purchase of converters. The
remainder was for other capital expenditures to maintain the value of the
Partnership's Owatonna/Glencoe System. Funding for these expenditures was
provided by cash generated from operations. Anticipated capital expenditures
for the remainder of 1998 are approximately $145,600. Of these expenditures,
approximately 61 percent relates to service drops to subscribers' homes and
approximately 33 percent relates to the construction of new cable plant
associated with new homes passed. The remainder is for other capital
expenditures to maintain the value of the Partnership's Owatonna/Glencoe System
until it is sold. Depending upon the timing of the closing of the sale of the
Owatonna/Glencoe System, the Partnership will make only the portion of the
budgeted capital expenditures scheduled to be made during the Partnership's
continued ownership of the Owatonna/Glencoe System. Funding for these
expenditures is expected to be provided by cash generated from operations. The
Partnership is obligated to conduct its business in the ordinary course until
the Owatonna/Glencoe System is sold.
As of June 30, 1998, $3,135,000 was outstanding under the Partnership's
term loan agreement, which is payable in 24 consecutive quarterly installments
that commenced on March 31, 1998. As of June 30, 1998, $165,000 has been
repaid. Remaining installments due during 1998 total $82,500 due in September
and $82,500 due in December. These payments will be made only if the
Owatonna/Glencoe System sale has not closed and will be funded by cash on hand
and cash generated from operations. The entire remaining outstanding balance at
the time of the sale of the Owatonna/Glencoe System will be repaid upon the
closing of the sale. Interest on outstanding principal amounts on the credit
facility is computed at the Partnership's option of the 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, 1998 and 1997 were 6.97
percent and 7.06 percent, respectively.
A primary objective of the Partnership has been to provide quarterly cash
distributions from operating cash flow to its partners. The General Partner has
agreed to defer its portion of cash flow distributions until the Partnership is
liquidated. To date, the limited partners have received a total of $8,699,000
in distributions from cash flow, or $1,023 for each $1,000 invested in the
Partnership. Quarterly cash distributions were paid to the limited partners
through the final quarter of 1997 but, due to the announced sale of the
Owatonna/Glencoe System, which is the Partnership's only remaining asset, the
Partnership does not expect to pay any additional cash flow distributions during
the remaining term of the Partnership. The operating cash flow of the
Owatonna/Glencoe System generated during 1998 will be distributed 99 percent to
the limited partners and 1 percent to the General Partner together with the
partners' respective shares of the net proceeds of the sale of the
Owatonna/Glencoe System.
The Partnership has sufficient cash on hand and cash generated from
operations to fund the liquidity needs of the Partnership's Owatonna/Glencoe
System until it is sold.
The Year 2000 issue is the result of many computer programs being written
such that they will malfunction when reading a year of "00." This problem could
cause system failure or miscalculations causing disruptions of business
processes.
The General Partner has initiated an assessment of its computer
applications to determine the extent of the problem. Based on this assessment,
the General Partner has determined that the majority of its computer
applications supporting business processes, including accounting and billing,
are designed to handle the Year 2000 appropriately.
The General Partner is currently focusing its efforts on the impact of the
Year 2000 issue on service delivery. The General Partner has established an
internal team to address this issue. The General Partner is identifying and
testing all date-sensitive equipment involved in delivering service to the
Partnership's customers. In addition, the General Partner will assess the
Partnership's options regarding repair or replacement of affected equipment
during this testing. The General Partner believes that the financial impact
will not be material.
9
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
As a result of the sale of the Milwaukie System in March 1997, the
following discussion of results of operations, through operating income,
pertains only to the results of operations for the Owatonna/Glencoe System for
the three and six month periods ended June 30, 1998 and 1997.
Revenues of the Partnership increased $59,282, or approximately 7 percent,
to $857,590 for the three months ended June 30, 1998 from $798,308 for the
similar period in 1997. Revenues increased $118,786, or approximately 8
percent, to $1,691,623 for the six month period ended June 30, 1998 from
$1,572,837 for the similar period in 1997. The increases in revenues were
primarily the result of basic service rate increases and an increase in the
number of basic subscribers. Basic service rate increases accounted for
approximately 32 percent and 39 percent, respectively, of the increases in
revenues for the three and six month periods ended June 30, 1998. Increases in
the number of basic subscribers accounted for approximately 27 percent and 28
percent, respectively, of the increases in revenues for the three and six month
periods ended June 30, 1998. The number of basic subscribers increased by 218,
or approximately 3 percent, to 8,658 subscribers at June 30, 1998 from 8,440
subscribers at June 30, 1997. No other individual factor contributed
significantly to the increases in revenues.
Operating expenses consist primarily of costs associated with the operation
and 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 marketing expenses.
Operating expenses increased $17,880, or approximately 4 percent, to
$489,329 for the three month period ended June 30, 1998 from $471,449 for the
similar 1997 period. Operating expenses increased $23,709, or approximately 3
percent, to $972,744 for the six month period ended June 30, 1998 from $949,035
for the similar 1997 period. The increases in operating expenses for the three
and six month periods were primarily due to increases in programming costs. No
other individual factor contributed significantly to the increases in operating
expenses. Operating expenses represented 57 percent and 59 percent of revenue
for the three month periods ended June 30, 1998 and 1997, respectively, and
represented 58 percent and 60 percent of revenue for the six month periods ended
June 30, 1998 and 1997, respectively.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard. Operating cash flow increased
$41,402, or approximately 13 percent, to $368,261 for the three month period
ended June 30, 1998 from $326,859 for the comparable 1997 period. For the six
month periods ended June 30, 1998 and 1997, operating cash flow increased
$95,077, or approximately 15 percent, to $718,879 in 1998 from $623,802 in 1997.
These increases were due to the increases in revenues exceeding the increases in
operating expenses.
Management fees and allocated overhead from Jones Intercable, Inc.
decreased $5,405, or approximately 5 percent, to $102,514 for the three month
period ended June 30, 1998 from $107,919 for the comparable 1997 period. This
decrease for the three month period was primarily due to the timing of certain
expenses allocated from Jones Intercable, Inc. For the six month periods ended
June 30, 1998 and 1997, management fees and allocated overhead from Jones
Intercable, Inc. increased $1,945, or approximately 1 percent, to $196,009 in
1998 from $194,064 in 1997. This increase was primarily due to the timing of
certain expenses allocated from Jones Intercable, Inc. and the increase in
revenues, upon which such management fees and allocations are based.
Depreciation and amortization decreased $4,681, or approximately 3 percent,
to $151,562 for the three month period ended June 30, 1998 from $156,243 in
1997. For the six month periods ended June 30, 1998 and 1997, depreciation and
amortization decreased $30,390, or approximately 9 percent, to $297,733 in 1998
from $328,123 in 1997. These decreases were due to the maturation of a portion
of both the tangible and the intangible asset base.
Operating income increased $51,488 to $114,185 for the three month period
ended June 30, 1998 from $62,697 for the similar 1997 period. For the six month
periods ended June 30, 1998 and 1997, operating income increased $123,522 to
$225,137 in 1998 from $101,615 in 1997. These increases were primarily due to
the increases in operating cash flow and the decreases in depreciation and
amortization.
10
<PAGE>
Interest expense increased $15,897, or approximately 37 percent, to
$58,364 for the three months ended June 30, 1998 from $42,467 for the similar
1997 period due to higher outstanding balances on the Partnership's interest
bearing obligations. Interest expense decreased $1,825, or approximately 2
percent, to $116,869 for the six month period ended June 30, 1998 from $118,694
for the similar 1997 period. This decrease was primarily due to lower effective
interest rates.
The Partnership reported net income of $52,418 for the three months ended
June 30, 1998 compared to a net loss of $41,500 for the comparable 1997 period.
This change was a result of the factors discussed above. The Partnership
reported net income of $110,774 for the six months ended June 30, 1998 compared
of the gain on the sale of the Milwaukie System in 1997.
11
<PAGE>
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
12
<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 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 13, 1998
13
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0
0
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