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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, 2000
[ ] 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.
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Exact name of registrant as specified in charter
Colorado #84-1010417
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State of organization I. R. S. employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
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Address of principal executive office
(215) 665-1700
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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 _____
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JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 2000 1999
------ ------------ ------------
<S> <C> <C>
Distribution receivable from Cable Television Joint Venture $ 888,000 $ 2,500,000
Investment in Cable Television Joint Venture 249,321 249,321
------------ ------------
Total assets $ 1,137,321 $ 2,749,321
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Advances from affiliates $ 41,538 $ 112,000
Accrued distribution to limited partners - 1,500,000
------------ ------------
Total liabilities 41,538 1,612,000
------------ ------------
PARTNER'S CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Distributions (110,219) (110,219)
Accumulated earnings 109,219 109,219
------------ ------------
- -
------------ ------------
Limited Partners-
Net contributed capital (83,884 units outstanding
at June 30, 2000 and December 31, 1999) 34,449,671 34,449,671
Distributions (46,288,222) (46,288,222)
Accumulated earnings 12,934,334 12,975,872
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1,095,783 1,137,321
------------ ------------
Total liabilities and partners' capital $ 1,137,321 $ 2,749,321
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
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JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OTHER INCOME (EXPENSE) $ (6,885) $ 10,231 $ (41,538) $ (5,813)
EQUITY IN NET INCOME OF CABLE
TELEVISION JOINT VENTURE - 209,470 - 159,012
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (6,885) $ 219,701 $ (41,538) $ 153,199
========== ========== ========== ==========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ - $ 2,197 $ - $ 1,532
========== ========== ========== ==========
Limited Partners $ (6,885) $ 217,504 $ (41,538) $ 151,667
========== ========== ========== ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (0.09) $ 2.59 $ (0.50) $ 1.81
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 83,884 83,884 83,884 83,884
========== ========== ========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
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JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
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<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
----------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (41,538) $ 153,199
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Equity in net income of Cable Television Joint Venture - (159,012)
Decrease in distribution receivable from Cable
Television Joint Venture 112,000 -
Increase (decrease) in advances from affiliates (70,462) 5,813
------------ ------------
Net cash provided by operating activities - -
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in distribution receivable from Cable
Television Joint Venture 1,500,000 -
Distribution to limited partners (1,500,000) -
------------ ------------
Net cash provided by financing activities - -
------------ ------------
Net change in cash - -
Cash, beginning of period - -
------------ ------------
Cash, end of period $ - $ -
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 5,625 $ -
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
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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 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-
B, Ltd. (the "Partnership") at June 30, 2000 and December 31, 1999, its
Statements of Operations for the three and six month periods ended June 30, 2000
and 1999 and its Statements of Cash Flows for the six month periods ended June
30, 2000 and 1999. Certain prior period amounts have been reclassified to
conform to the 2000 presentation.
The Partnership owns a 40 percent interest in Jones Cable Income Fund 1-B/C
Venture (the "Venture"). Jones Cable Income Fund 1-C, Ltd. ("Fund 1-C") owns a
60 percent interest in the Venture. Neither the Partnership nor the Venture
currently own any cable television systems. The Venture is expected to be
dissolved in 2000. The Partnership has continued in existence because of the
escrow proceeds, which were released in early August 2000, and also because of
pending litigation in which the Partnership is a party. The General Partner
cannot predict when the Partnership will be dissolved.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in Jones Intercable, Inc. ("Jones Intercable"), the
Partnership's general partner until March 2, 2000. In December 1999, Comcast and
Jones Intercable entered into a definitive merger agreement pursuant to which
Comcast agreed to acquire all of the outstanding shares of Jones Intercable not
yet owned by Comcast. On March 2, 2000, Jones Intercable was merged with and
into Comcast JOIN Holdings, Inc., a wholly owned subsidiary of Comcast. As a
result of this transaction, Jones Intercable no longer exists and Comcast JOIN
Holdings, Inc. continued as the surviving corporation of the merger. On July 28,
2000, Comcast JOIN Holdings, Inc. was merged with and into Comcast Cable
Communications, Inc., ("Comcast Cable"), another wholly owned subsidiary of
Comcast. Comcast Cable is now the general partner of the Partnership. References
in these Notes to "the General Partner" refer to Comcast Cable. The General
Partner shares corporate offices with Comcast at 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
(2) On July 30, 1999, the Venture sold the Myrtle Creek System to an
unaffiliated party for a sales price of $9,614,208. From the sale proceeds, the
Venture repaid the outstanding balance on its credit facility of $2,400,000,
paid a $240,355 brokerage fee to The Intercable Group, Ltd., a subsidiary of
Jones Intercable, representing 2.5 percent of the sales price, for acting as a
broker in the transaction, settled working capital adjustments and deposited
$500,000 into an interest-bearing indemnity escrow account. The remaining sale
proceeds of $6,300,000 were distributed 40 percent to the Partnership and 60
percent to Fund 1-C. From the Partnership's $2,500,000 portion of this amount,
the Partnership retained $1,000,000 to cover its administrative expenses and the
balance was distributed in January 2000 to the Partnership's limited partners of
record as of the July 30, 1999 closing date of the sale of the Myrtle Creek
System. The $1,500,000 distributed to the Partnership's limited partners from
the sale of the Myrtle Creek System resulted in a distribution to limited
partners of $18 for each $500 limited partnership interest, or $36 for each
$1,000 invested in the Partnership.
For a period of one year following the closing date, $500,000 of the sale
proceeds remained in escrow as security for the Venture's agreement to indemnify
the buyer under the asset purchase agreement. Amounts remaining from this
indemnity escrow account plus interest earned on the escrowed funds were
returned to the Venture in early August 2000 and the Venture intends to
distribute all of its cash to its constituent partners prior to its dissolution.
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(3) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 2000 1999
------ ------------ ------------
<S> <C> <C>
Cash $ 6,290,222 $ 7,033,894
Proceeds from sale in interest-bearing account 520,836 509,375
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Total assets $ 6,811,058 $ 7,543,269
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LIABILITIES AND PARTNERS' CAPITAL
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Accrued distributions to Venture Partners $ 1,988,000 $ 6,300,000
Advances from affiliates 4,189,276 619,665
Partner's contributed capital, net (21,263,514) (21,273,692)
Accumulated earnings 21,897,296 21,897,296
------------ ------------
Total liabilities and partners' capital $ 6,811,058 $ 7,543,269
============ ============
</TABLE>
UNAUDITED STATEMENTS OF OPERATIONS
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<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ - $ 587,663 $ - $1,195,013
Operating expenses - 353,486 - 725,418
Management fees and allocated overhead
from Jones Intercable - 54,691 - 128,483
Depreciation and amortization - 198,520 - 397,044
---------- ---------- ---------- ----------
Operating loss - (19,034) - (55,932)
---------- ---------- ---------- ----------
Interest expense - (30,192) - (80,766)
Interest income - 51 - 15,165
Other, net - 575,884 - 521,367
---------- ---------- ---------- ----------
Net income $ - $ 526,709 $ - $ 399,834
========== ========== ========== ==========
</TABLE>
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The Partnership reimburses its general partner for certain administrative
expenses. These expenses represent the salaries and related benefits paid for
corporate personnel. Such personnel provide administrative, accounting, tax,
legal and investor relations services to the Partnership. Such services, and
their related costs, are necessary to the administration of the Partnership
until it is dissolved. Such costs were charged to other expense on the
Statements of Operations. Reimbursements made by the Partnership to its general
partner for administrative expenses during the three and six month periods ended
June 30, 2000 were $7,714 and $19,278, respectively. Reimbursements by the
Venture to its general partner for administrative expenses during the three and
six month periods ended June 30, 1999 were $25,308 and $68,732, respectively, of
which $10,065 and $27,335, respectively, were attributed to the Partnership's 40
percent interest in the Venture.
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JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
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FINANCIAL CONDITION
-------------------
The Partnership owns a 40 percent interest in the Venture. This investment
is accounted for under the equity method.
On July 30, 1999, the Venture sold the Myrtle Creek System to an
unaffiliated party for a sales price of $9,614,208. From the sale proceeds, the
Venture repaid all of its indebtedness, paid a brokerage fee, settled working
capital adjustments and deposited $500,000 into an interest-bearing indemnity
escrow account. The remaining sale proceeds of $6,300,000 were distributed 40
percent to the Partnership and 60 percent to Fund 1-C. From the Partnership's
$2,500,000 portion of this amount, the Partnership retained $1,000,000 to cover
its administrative expenses and the balance was distributed in January 2000 to
the Partnership's limited partners of record as of the July 30, 1999 closing
date of the sale of the Myrtle Creek System. The $1,500,000 distributed to the
Partnership's limited partners from the sale of the Myrtle Creek System resulted
in a distribution to limited partners of $18 for each $500 limited partnership
interest, or $36 for each $1,000 invested in the Partnership.
For a period of one year following the closing date, $500,000 of the sale
proceeds remained in escrow as security for the Venture's agreement to indemnify
the buyer under the asset purchase agreement. Amounts remaining from this
indemnity escrow account plus interest earned on the escrowed funds were
returned to the Venture in early August 2000 and the Venture intends to
distribute all of its cash to its constituent partners prior to its dissolution.
The Venture is expected to be dissolved in 2000. The only asset of the
Partnership is the cash it will receive from the Venture, which will be held in
reserve to pay the Partnership's administrative and legal expenses until the
Partnership is dissolved. The Partnership has continued in existence because of
pending litigation in which the Partnership is a party. The General Partner
cannot predict when the Partnership will be dissolved.
RESULTS OF OPERATIONS
---------------------
Neither the Partnership nor the Venture currently own any cable television
systems; therefore, a discussion of results of operations would not be
meaningful. The Partnership incurred other expense of $41,538 in the first six
months of 2000, which related to various costs associated with the
administration of the Partnership.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Comcast Cable Communications, Inc. (as successor-in-interest to Jones
Intercable, Inc.), each of its subsidiaries that serve as general partners of
its managed cable partnerships and most of its managed cable partnerships,
including the Partnership, are named defendants in a case captioned Everest
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Cable Investors, LLC, Everest Properties, LLC, Everest Properties II, LLC, KM
-----------------------------------------------------------------------------
Investments, LLC and KH Financial, Inc., plaintiffs v. Jones Intercable, Inc.,
------------------------------------------------------------------------------
et al., defendants (Superior Court, Los Angeles County, State of California,
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Case No. BC 213632), which was first filed in July 1999.
Plaintiffs allege that they had formed a coordinated plan amongst
themselves to acquire up to 4.9% of the limited partnership interests in each of
the managed partnerships named as defendants, and that plaintiffs were
frustrated in this purpose by Jones Intercable's refusal to provide plaintiffs
with lists of the names and addresses of the limited partners of these
partnerships. The complaint alleges that Jones Intercable's actions constituted
a breach of contract, a breach of Jones Intercable's implied covenant of good
faith and fair dealing owed to the plaintiffs as limited partners, a breach of
Jones Intercable's fiduciary duty owed to the plaintiffs as limited partners and
tortious interference with prospective economic advantage. Plaintiffs allege
that Jones Intercable's failure to provide them with the partnership lists
prevented them from making their tender offers and that they have been injured
by such action in an amount to be proved at trial, but not less than $17
million.
In September 1999, the defendants filed demurrers to the plaintiffs'
complaint and a hearing on this matter was held in October 1999. In December
1999, the Court sustained the defendants' demurrers to each cause of action on
the grounds of uncertainty, but permitted the plaintiffs to amend their
complaint to attempt to cure the deficiencies in the pleadings that caused the
Court to sustain the demurrers. The plaintiffs filed their first amended
complaint in January 2000. In March 2000, the defendants filed demurrers to the
plaintiffs' first amended complaint and a hearing on the matter was held in
April 2000. In May 2000, the Court issued a ruling that sustained the
defendants' demurrers without leave to amend as to all plaintiffs except KM
Investments, LLC, and it sustained the defendants' demurrers with leave to amend
as to plaintiff KM Investments, LLC, and KM Investments, LLC has filed a second
amended complaint to attempt to cure the deficiencies in the pleadings.
Plaintiffs have stated an intention to appeal the rulings sustaining the
demurrers to the first amended complaint.
Discovery in the case also has begun, and the defendants have responded to
the plaintiffs' first set of interrogatories and to the plaintiffs' first demand
for the production of documents. Comcast Cable Communications, Inc. believes
that the defendants have defenses to the plaintiffs' claims for relief and
challenges to the plaintiffs' claims for damages, and Comcast Cable
Communications, Inc. intends to defend this lawsuit vigorously.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
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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-B, LTD.
BY: COMCAST CABLE COMMUNICATIONS, INC.
General Partner
By: /S/ Lawrence J. Salva
--------------------------------------------
Lawrence J. Salva
Senior Vice President
(Principal Accounting Officer)
Dated: August 11, 2000
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