<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 March 31, 1995.
--------------
/ / 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: 0-14906
JONES CABLE INCOME FUND 1-B, LTD.
- - --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010417
- - --------------------------------------------------------------------------------
State of organization I. R. S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
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> 2
JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1995 1994
------ -------------- --------------
<S> <C> <C>
CASH $ 163,809 $ 116,839
RECEIVABLES:
Trade receivables, less allowance for
doubtful receivables of $25,512 and $14,323 at
March 31, 1995 and December 31, 1994,
respectively 162,696 167,587
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 11,182,162 10,801,551
Less- accumulated depreciation (5,180,149) (4,948,058)
---------- ----------
6,002,013 5,853,493
Subscriber lists, net of accumulated amortization
of $3,117,800 and $3,024,266 at March 31, 1995
and December 31, 1994, respectively 1,434,200 1,527,734
Favorable leaseholds, net of accumulated amortization
of $99,800 and $96,806 at March 31, 1995
and December 31, 1994, respectively 57,900 60,894
Costs in excess of interests in net assets
purchased, net of accumulated amortization
of $10,200 and $9,894 at March 31, 1995
and December 31, 1994 , respectively 38,700 39,006
Investment in cable television joint venture 3,437,630 4,086,463
---------- ----------
Total investment in cable television
properties 10,970,443 11,567,590
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 74,409 22,362
---------- ----------
$11,371,357 $11,874,378
========== ==========
Total assets
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE> 3
JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- -------------- --------------
<S> <C> <C>
LIABILITIES:
Debt $ 6,036,678 $ 3,544,000
Accounts payable-
Trade 4,491 5,046
General Partner 153,339 2,162,870
Accrued liabilities 296,913 433,865
Accrued distribution to
limited partners 250,000 -
Subscriber prepayments 46,850 42,814
----------- -----------
Total liabilities 6,788,271 6,188,595
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (186,155) (177,653)
Distributions (102,644) (100,119)
----------- -----------
(287,799) (276,772)
----------- -----------
Limited Partners-
Net contributed capital
(83,884 units outstanding at
March 31, 1995 and December 31, 1994) 34,449,671 34,449,671
Accumulated deficit (18,311,080) (17,469,410)
Distributions (11,267,706) (11,017,706)
----------- -----------
4,870,885 5,962,555
----------- -----------
Total liabilities and partners'
capital (deficit) $ 11,371,357 $ 11,874,378
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE> 4
JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-------------------------------------
1995 1994
----------------- ----------------
<S> <C> <C>
REVENUES $1,178,755 $1,081,862
COSTS AND EXPENSES:
Operating expense 772,716 647,763
Management fees and allocated overhead from
General Partner 151,184 139,196
Depreciation and amortization 334,804 394,406
--------- ---------
OPERATING LOSS (79,949) (99,503)
--------- ---------
OTHER INCOME (EXPENSE):
Interest expense (122,579) (89,532)
Other, net 1,189 (15,975)
--------- ---------
Total other income (expense) (121,390) (105,507)
--------- ---------
LOSS BEFORE EQUITY IN NET LOSS
OF CABLE TELEVISION JOINT VENTURE (201,339) (205,010)
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE (648,833) (494,115)
--------- ---------
NET LOSS $ (850,172) $ (699,125)
========= =========
ALLOCATION OF NET LOSS:
General Partner $ (8,502) $ (6,991)
========= =========
Limited Partners $ (841,670) $ (692,134)
========= =========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (10.03) $ (8.25)
========= =========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 83,884 83,884
========= =========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE> 5
JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------------
1995 1994
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (850,172) $(699,125)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 334,804 394,406
Equity in net loss of cable television
joint venture 648,833 494,115
Decrease in trade receivables 4,891 14,131
Decrease (increase) in deposits, prepaid
expenses and deferred charges 192,074 (12,618)
Decrease in trade accounts payable, accrued
liabilities and subscriber prepayments (135,996) (80,738)
---------- --------
Net cash provided by operating activities 194,434 110,171
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (380,611) (237,154)
---------- --------
Net cash used in investing activities (380,611) (237,154)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (3,507,322) (4,210)
Proceeds from borrowings 6,000,000 -
Distributions to limited partners (250,000) -
Increase in accrued distributions 250,000 -
Increase (decrease) in advances from General Partner (2,009,531) 146,673
---------- --------
Net cash provided by financing activities 233,147 142,463
---------- --------
Increase in cash 46,970 15,480
Cash, beginning of period 116,839 44,489
---------- --------
Cash, end of period $ 163,809 $ 59,969
========== ========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 83,195 $ 89,406
========== ========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE> 6
JONES CABLE INCOME FUND 1-B, 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-B, Ltd. (the "Partnership") at March 31, 1995 and December 31, 1994 and its
Statements of Operations and Cash Flows for the three month periods ended March
31, 1995 and 1994. Results of operations for this period are not necessarily
indicative of results to be expected for the full year.
The Partnership owns and operates the cable television system serving
the areas in and around Orangeburg, South Carolina (the "Orangeburg System").
In addition, the Partnership owns an approximate 40 percent interest in Jones
Cable Income Fund 1-B/C Venture (the "Venture"). The Venture owns and operates
the cable television systems serving the areas in and around Brighton and
Broomfield, Colorado; Lake County, California; Myrtle Creek, Oregon; South
Sioux City, Nebraska; and Three Rivers and Watervliet, Michigan.
(2) Jones Intercable, Inc., a publicly held Colorado corporation, (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 three month periods ended March 31, 1995 and 1994 (exclusive of the
Partnership's approximate 40 percent interest in the Venture) were $58,923 and
$54,093, respectively.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent salaries and
benefits paid to corporate personnel, rent, data processing 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 overhead costs are allocated based on revenues of the
Partnership as a percentage of total revenues of owned and managed cable
television systems of the General Partners. 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 charged the
Partnership by the General Partner for allocated overhead and administrative
expenses for the three month periods ending March 31, 1995 and 1994 (exclusive
of the Partnership's approximate 40 percent interest in the Venture) were
$92,261 and $85,103, respectively.
6
<PAGE> 7
(3) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS March 31, 1995 December 31, 1994
------ -------------- -----------------
<S> <C> <C>
Cash and accounts receivable $1,016,361 $ 769,260
Investment in cable television properties 51,747,866 53,281,053
Other assets 420,803 495,461
---------- ----------
Total assets $53,185,030 $54,545,774
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 42,840,523 $ 42,383,339
Accounts payable and accrued liabilities 1,689,825 1,876,289
Partners' contributed capital, net 39,504,008 39,504,008
Accumulated deficit (30,849,326) (29,217,862)
----------- -----------
Total liabilities and partners' capital $ 53,185,030 $ 54,545,774
=========== ===========
</TABLE>
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
-----------------------------------------
1995 1994
---------------- -----------------
<S> <C> <C>
Revenues $ 5,442,911 $ 5,179,248
Operating expense (3,282,012) (3,005,903)
Management fees and allocated overhead
from Jones Intercable, Inc. (696,965) (678,354)
Depreciation and amortization (2,221,797) (2,173,829)
---------- ----------
Operating loss (757,863) (678,838)
Interest expense (868,493) (565,971)
Other, net (5,108) 2,378
---------- ----------
Net loss $(1,631,464) $(1,242,431)
========== ==========
</TABLE>
Management fees paid to Jones Intercable, Inc. by the Venture totaled
$272,145 and $258,962, respectively, for the three months ended March 31, 1995
and 1994. Reimbursements for overhead and administrative expenses totalled
$424,820 and $419,392, respectively, for the three months ended March 31, 1995
and 1994. Management fees paid by the Venture and attributable to the
Partnership totalled $108,232 and $102,989, respectively, for the three months
ended March 31, 1995 and 1994. Reimbursements for overhead and administrative
expenses attributable to the Partnership totalled $168,951 and $166,792
respectively, for the three months ended March 31, 1995 and 1994.
7
<PAGE> 8
JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
For the three months ended March 31, 1995, the Partnership generated cash
from operating activities totaling $194,434, which is available to fund capital
expenditures and non-operating costs. During the first quarter of 1995,
approximately $381,000 was expended for capital improvements within the
Partnership's Orangeburg System. Construction of cable television plant
extensions accounted for approximately 38 percent of the expenditures.
Approximately 28 percent of these expenditures related to service drops to
homes. Approximately 23 percent of these expenditures related to the purchase
of converters. These expenditures were funded by borrowings from the
Partnership's credit facility. Anticipated capital expenditures for the
remainder of 1995 are approximately $1,835,000. Of this total, approximately
34 percent is for service drops to homes, approximately 24 percent are for the
purchase of converters and approximately 17 is for advertising sales equipment
for the Orangeburg System. The remainder of the expenditures is expected to be
used for various system enhancements. Funding for these expenditures is
expected to be provided by cash generated from operations and available
borrowings under the Partnership's credit facility.
In January 1995, the General Partner completed negotiations for a new
revolving credit facility with a maximum amount available of $8,500,000. The
partnership borrowed $5,800,000 to repay the then-outstanding balance of
$3,500,000 under the prior credit facility and to repay the General Partner its
advances. At March 31, 1995, $6,000,000 was outstanding, leaving $2,500,000 of
borrowings available. The revolving credit facility converts to a term loan on
December 31, 1997 at which time the then-outstanding loan balance will be due
in 20 consecutive quarterly installments beginning March 31, 1998. Interest on
the revolving credit facility is at the Partnership's option of the Prime rate
plus 1/4 percent or the London Interbank Offered Rate plus 1-1/2 percent. The
effective interest rates on outstanding obligations were 8.25 percent and 4.88
percent, respectively, at March 31, 1995 and 1994.
One of the primary objectives of the Partnership is to provide quarterly
distributions from cash flow. In January 1995, the Partnership completed
negotiations for a new revolving credit agreement that will provide liquidity
to fund capital expenditures. In March 1995, the Partnership declared a
$250,000 distribution. The Partnership will attempt to provide some level of
distributions from cash generated from operations for the remainder of 1995.
No determination has been made regarding the level of the future distributions.
The level of distributions, if any, will be determined on a quarter-by-quarter
basis.
The Venture-
In addition to the Orangeburg System, the Partnership owns an
approximate 40 percent interest in Jones Cable Income Fund 1-B/C Venture (the
"Venture"). The investment is accounted for under the equity method. When
compared to the December 31, 1994 balance, this investment has decreased by
$648,833. This decrease represents the Partnership's proportionate share of
losses during the first quarter of 1995. The Venture's losses which are
principally the result of depreciation and amortization charges are expected to
continue.
For the three months ended March 31, 1995, the Venture generated net
cash from operating activities totaling $572,426, which is available to fund
capital expenditures and non-operating costs. During the first quarter of
1995, capital improvements within the Venture's systems totaled approximately
$685,000. Approximately 23 percent of these expenditures were for service
drops to homes and approximately 38 percent were for the rebuild and upgrade of
the Venture's Systems. The remainder of these expenditures related to various
enhancements in all of the Venture's systems. Funding for these expenditures
was provided by cash generated from operations and borrowings under the
Venture's credit facility. Anticipated capital expenditures for the remainder
of 1995 are approximately $4,477,000. System upgrades and rebuilds are
expected to account for approximately 21 percent of the expenditures, and
service drops to homes are expected to account for approximately 26 percent of
the anticipated expenditures. The remainder of the expenditures will be for
various enhancements in the Venture's systems. Funding for these expenditures
is expected to be provided by cash generated from operations and available
borrowings from the Venture's credit facility.
8
<PAGE> 9
At March 31, 1995, the Venture's $45,000,000 credit facility had
$42,500,000 outstanding, leaving $2,500,000 of available borrowings. The
revolving credit facility matures on June 30, 1997, at which time the
outstanding balance is payable in full. Interest on outstanding principal is
calculated at the Venture's option of the Prime rate plus 1/2 percent, or LIBOR
plus 1-1/2 percent. The effective interest rates on amounts outstanding as of
March 31, 1995 and 1994 were 7.93 percent and 4.98 percent, respectively.
In January 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $15,000,000. The Venture
paid a fee of $145,500. The agreement protects the Venture for LIBOR interest
rates that exceed 7 percent for three years from the date of the agreement.
One of the primary objectives of the Venture is to provide quarterly
cash distributions to the Venture partners. Such cash returns are primarily
from cash generated through operating activities of the Venture. The Venture's
credit facility has a maximum amount available of $45,000,000, of which
$42,500,000 was outstanding on March 31, 1995. This limits the amount of
borrowing available to the Venture to fund capital expenditures; therefore, the
Venture used cash generated from operations to fund capital expenditures and
did not declare any distributions during the first quarter of 1995. The
Venture is not expected to reinstate distributions in the near term and thus
the Partnership will not have funds from the Venture to distribute to the
limited partners but will make cash distributions from the operations of its
Orangeburg system.
The General Partner believes that the Partnership and the Venture have
sufficient sources of capital available from cash generated from operations to
meet its presently anticipated needs.
Regulatory Matters
Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally imposes a greater degree of regulation on the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable system in the United States, including those
owned by the Partnership and the Venture, are subject to rate regulation of
basic cable services. In addition, the 1992 Cable Act allows the FCC to
regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993. In compliance with these rules, the Partnership and the Venture reduced
rates charged for certain regulated services effective September 1, 1993.
On February 22, 1994, however, the FCC adopted several additional rate
orders including orders which revised its earlier-announced regulatory scheme
with respect to rates and established interim cost-of-service regulations. The
FCC's February 22, 1994 regulations generally require rate reductions, absent a
successful cost-of-service showing, of 17 percent of September 30, 1992 rates,
adjusted for inflation, channel modifications, equipment costs, and increases
in programming costs. The new regulations became effective on May 15, 1994,
but operators could elect to defer rate reductions to July 14, 1994, so long as
they made no changes in their rates and did not restructure service offerings
between May 15 and July 14.
The Partnership has filed a cost-of-service showing for the Orangeburg
System and thus anticipates no further reductions in rates. The
cost-of-service showing has not yet received final approval from franchising
authorities, however, and there can be no assurance that the Partnership's
cost-of-service showing will prevent further rate reductions until such final
approval is received. The Venture has filed cost-of service showings for its
Brighton, Broomfield and Boulder County, Colorado; Myrtle Creek, Oregon; South
Sioux City, Nebraska; and Three Rivers and Watervliet, Michigan systems and
thus anticipates no further reductions in rates in these systems. The
cost-of-service showings have not yet received final approval from franchising
authorities, however, and there can be no assurance that the Venture's
cost-of-service showings will prevent further rate reductions until such final
approvals are received. The Venture complied with the February 1994 benchmark
regulations and further reduced rates in its Lake County, California system
effective July 1994.
9
<PAGE> 10
RESULTS OF OPERATIONS
The Partnership-
Revenues of the Partnership's Orangeburg System increased $96,893, or
9 percent, from $1,081,862 at March 31, 1994 to $1,178,755 at March 31, 1995.
The increase was primarily the result of an increase in the number of basic
subscribers, which accounted for approximately 38 precent of the increase. The
number of basic subscribers increased 368, or approximately 3 percent, from
11,810 at March 31, 1994 to 12,178 at March 31, 1995. No other individual
factor significantly affected the increase 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 $124,953, or 19 percent, from $647,763 at
March 31, 1994 to $772,716 at March 31, 1995. Operating expenses represented
60 percent of revenue in 1994 and 70 percent of revenue in 1995. Increases in
advertising sales expenses accounted for approximately 21 percent of the
increase in expenses. No other individual factor significantly affected the
increase in expenses. Management fees and allocated overhead from the General
Partner increased $11,988, or approximately 9 percent, from $139,196 at March
31, 1994 to $151,184 at March 31, 1995 due to an increase in allocated expenses
from the General Partner. The General Partner has experienced increases in
expenses including personnel costs, a portion of which is allocated to the
Partnership. Depreciation and amortization expense decreased $59,602, or
approximately 15 percent, from $394,406 at March 31, 1994 to $334,804 at March
31, 1995 due to maturation of the intangible asset base.
Operating loss decreased $19,554, or approximately 19 percent, from
$99,503 at March 31, 1994 to $79,949 at March 31, 1995 due to the increase in
revenues and decrease in depreciation and amortization expense exceeding the
increases in operating expenses and managment fees and allocated overhead from
the General Partner. Operating income before depreciation and amortization
decreased $40,048, or approximately 13 percent, from $294,903 for the three
months ended March 31, 1994 to $254,855 for the similar period in 1995. This
decrease is due to the increase in management fees and allocated overhead from
the General Partner and the increase in operating, general and administrative
expenses exceeding the increase in revenues. The decrease in operating income
before depreciation and amortization reflects the current operating environment
of the cable television industry. The FCC rate regulations under the 1992
Cable Act have caused revenues to increase more slowly than otherwise would
have been the case. In turn, this has caused expenses which are a function of
revenue, such as franchise fees, copyright fees and management fees, to
increase more slowly than in prior years. However, other operating costs such
as programming fees, salaries and benefits and marketing costs as well as other
costs incurred by the General Partner, which are allocated to the Partnership,
continue to increase at historical rates. This situation has led to reductions
in operating income before depreciation and amortization as a percent of
revenue ("Operating Margin"). Such reductions in Operating Margins may
continue in the near term as the Partnership and the General Partner incur cost
increases due to, among other things, increases in programming fees, compliance
costs associated with reregulation and competition, that exceed increases in
revenue. The General Partner will attempt to mitigate a portion of these
reductions through (a) new service offerings, (b) product re-marketing and
re-packaging and (c) marketing efforts targeted at non-subscribers.
Interest expense increased $33,047, or approximately 37 percent, from
$89,532 at March 31, 1994 to $122,579 at March 31, 1995 due primarily to higher
effective rates on interest bearing obligations. Loss before equity in net
loss of cable television joint venture decreased $3,671, or approximately 2
percent, from $205,010 at March 31, 1994 to $201,339 for the comparable 1995
period. This decrease is due primarily to the factors discussed above.
The Venture-
In addition to its Orangeburg, South Carolina system, the Partnership
owns an approximate 40 percent interest in the Venture.
Revenues of the Venture increased $263,663, or approximately 5
percent, from $5,179,248 at March 31, 1994 to $5,442,911 at March 31, 1995.
Since March 31, 1994, the Venture added 2,975 basic subscribers and 2,258
premium subscriptions, representing increases of 5 percent and 6 percent,
respectively. The number of basic subscribers increased from 59,688 at
March 31, 1994 to 62,663 at March 31, 1995. Premium subscriptions increased
from 40,549 at March 31, 1994 to 42,807 at March 31, 1995. This increase in
the subscriber base accounted for approximately 72 percent of the increase in
revenues. Increases in advertising sales revenue accounted for approximately
19 percent of the increase in revenues. No other single factor significantly
affected the increase in revenues.
10
<PAGE> 11
Operating expenses increased $276,109, or approximately 9 percent,
from $3,005,903 at March 31, 1994 to $3,282,012 at March 31 , 1995. Operating
expenses represented 58 percent of revenue for the first quarter of 1994
compared to 60 percent for the similar period in 1995. Personnel related costs
and programming costs were primarily responsible for the increase in expenses.
No other individual factors were significant to the increase in operating
expenses. Management fees and allocated overhead from the General Partner
increased $18,611, or approximately 3 percent, from $678,354 at March 31, 1994
to $696,965 at March 31, 1995 due to the increase in revenues, upon which such
fees and allocations are based, and increases in allocated expenses from the
General Partner. The General Partner has experienced increases in expenses,
including personnel costs, a portion of which are allocated to the Venture.
Depreciation and amortization expense increased $47,968, or
approximately 2 percent, from $2,173,829 to $2,221,797 for the three months
ended March 31, 1995 as compared to 1994. This increase was due to the
increase in the Venture's depreciable asset base.
Operating loss increased $79,025, or approximately 12 percent, from
$678,838 at March 31, 1994 to $757,863 at March 31, 1995 as a result of the
increases in operating expenses, management fees and allocated overhead from
the General Partner and depreciation and amortization expense exceeding the
increase in revenues. Operating income before depreciation and amortization
decreased $31,057, or approximately 2 percent, from $1,494,991 for the three
months ended March 31, 1994 to $1,463,934 in 1995. This decrease was due to
the increase in operating expenses and management fees and allocated overhead
from the General Partner exceeding the increase in revenue. The decrease in
operating income before depreciation and amortization reflects the current
operating environment of the cable television industry. The FCC rate
regulations under the 1992 Cable Act have caused revenues to increase more
slowly than otherwise would have been the case. In turn, this has caused
expenses which are a function of revenue, such as franchise fees, copyright
fees and management fees, to increase more slowly than in prior years.
However, other operating costs such as programming fees, salaries and benefits
and marketing costs as well as other costs incurred by the General Partner,
which are allocated to the Partnership, continue to increase at historical
rates. This situation has led to reductions in operating income before
depreciation and amortization as a percent of revenue ("Operating Margin").
Such reductions in Operating Margins may continue in the near term as the
Partnership and the General Partner incur cost increases due to, among other
things, increases in programming fees, compliance costs associated with
reregulation and competition, that exceed increases in revenue. The General
Partner will attempt to mitigate a portion of these reductions through (a) new
service offerings, (b) product re-marketing and re-packaging and (c) marketing
efforts targeted at non-subscribers.
Interest expense increased $302,522, or approximately 53 percent, from
$565,971 at March 31, 1994 to $868,493 at March 31, 1995. Higher effective
interest rates are responsible for the increase in interest expense.
Net loss increased $234,315, or approximately 31 percent, from
$748,316 at March 31, 1994 to $982,631 at March 31, 1995. These losses are due
to the factors discussed above and are expected to continue in the future.
11
<PAGE> 12
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> 13
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-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/Kevin P. Coyle
--------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: May 12, 1995
13
<PAGE> 14
INDEX TO EXHIBITS
Exhibit Description Page
- - ------- ----------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 163,809
<SECURITIES> 0
<RECEIVABLES> 162,696
<ALLOWANCES> (25,512)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,182,162
<DEPRECIATION> (5,180,149)
<TOTAL-ASSETS> 11,371,357
<CURRENT-LIABILITIES> 751,593
<BONDS> 6,036,678
<COMMON> 0
0
0
<OTHER-SE> 4,583,086
<TOTAL-LIABILITY-AND-EQUITY> 11,371,357
<SALES> 0
<TOTAL-REVENUES> 1,178,755
<CGS> 0
<TOTAL-COSTS> 1,258,704
<OTHER-EXPENSES> 200,150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 122,579
<INCOME-PRETAX> (850,172)
<INCOME-TAX> 0
<INCOME-CONTINUING> (850,172)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (850,172)
<EPS-PRIMARY> (10.03)
<EPS-DILUTED> (10.03)
</TABLE>
