<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 September 30, 1994
( ) 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: 1-9287
JONES INTERCABLE INVESTORS, L.P.
- - --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 36-3468573
- - --------------------------------------------------------------------------------
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
--- ---
Units outstanding as of the close of the period covered by this report.
8,322,632 Class A Units
<PAGE> 2
JONES INTERCABLE INVESTORS, L. P.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1994 1993
------ ------------- ------------
<S> <C> <C>
CASH $ 368,535 $ 366,508
TRADE RECEIVABLES, less allowance for doubtful
receivables of $83,866 and $66,380 at September 30, 1994
and December 31, 1993, respectively 667,543 754,318
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 57,807,838 51,833,995
Less- accumulated depreciation (24,448,325) (21,838,729)
------------ ------------
33,359,513 29,995,266
Franchise costs, net of accumulated amortization of
$34,936,139 and $32,364,488 at September 30, 1994 and
December 31, 1993, respectively 12,915,170 15,486,821
Subscriber lists, net of accumulated amortization of
$22,600,000 and $21,332,901 at September 30, 1994 and
December 31, 1993, respectively - 1,267,099
Costs in excess of interests in net assets purchased, net of
accumulated amortization of $45,999 and $41,310 at
September 30, 1994 and December 31, 1993, respectively 204,002 208,691
------------ ------------
Total investment in cable television properties 46,478,685 46,957,877
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 155,852 84,728
------------ -----------
Total assets $ 47,670,615 $ 48,163,431
============ ============
</TABLE>
The accompanying notes to unaudited financial
statements are an integral part of these unaudited balance sheets.
2
<PAGE> 3
JONES INTERCABLE INVESTORS, L. P.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------------------------------------- ------------ ------------
<S> <C> <C>
LIABILITIES:
Credit facility $ 21,200,000 $ 18,400,000
Other debt 409,480 629,472
Trade accounts payable 137,818 86,490
Accrued distribution to Class A unitholders 1,248,395 1,248,395
Accrued liabilities 1,445,333 1,249,896
Subscriber prepayments 122,595 134,233
----------- ------------
Total liabilities 24,563,621 21,748,486
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (19,097) (23,469)
------------ ------------
(18,097) (22,469)
------------ ------------
Class A unitholders-
Net contributed capital
(8,322,632 units outstanding at
September 30, 1994 and December 31, 1993) 116,433,492 116,433,492
Accumulated deficit (1,890,592) (2,323,454)
Distributions to unitholders (91,417,809) (87,672,624)
------------ ------------
23,125,091 26,437,414
------------ ------------
Total liabilities and partners' capital (deficit) $ 47,670,615 $ 48,163,431
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
<PAGE> 4
JONES INTERCABLE INVESTORS, L. P.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
1994 1993 1994 1993
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $6,905,746 $6,748,570 $20,532,939 $20,344,241
COSTS AND EXPENSES:
Operating, general and administrative 3,311,236 3,139,882 10,096,971 9,541,954
Management fees and allocated overhead
from General Partner 813,497 803,413 2,520,987 2,372,773
Depreciation and amortization 1,750,858 2,432,281 6,523,469 7,294,670
---------- ---------- ----------- -----------
OPERATING INCOME 1,030,155 372,994 1,391,512 1,134,844
---------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (347,864) (242,168) (886,708) (731,307)
Other, net (11,650) (25,378) (67,570) 2,657
---------- ---------- ----------- -----------
Total other income (expense), net (359,514) (267,546) (954,278) (728,650)
---------- ---------- ----------- -----------
NET INCOME $ 670,641 $ 105,448 $ 437,234 $ 406,194
========== ========== =========== ===========
ALLOCATION OF NET INCOME:
General Partner $ 6,706 $ 1,054 $ 4,372 $ 4,062
========== ========== =========== ===========
Class A Unitholders $ 663,935 $ 104,394 $ 432,862 $ 402,132
========== ========== =========== ===========
NET INCOME PER CLASS A UNIT $ .08 $ .01 $ .05 $ .05
========== ========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
CLASS A UNITS OUTSTANDING 8,322,632 8,322,632 8,322,632 8,322,632
========== ========== =========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE> 5
JONES INTERCABLE INVESTORS, L. P.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
------------------------------------
1994 1993
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 437,234 $ 406,194
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,523,469 7,294,670
Decrease (increase) in trade receivables, net 86,775 (164,352)
Decrease (increase) in deposits, prepaid expenses
and deferred charges (71,124) 15,392
Increase (decrease) in trade accounts payable, accrued
liabilities and subscriber prepayments 235,127 (226,974)
----------- -----------
Net cash provided by operating activities 7,211,481 7,324,930
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (6,044,277) (2,986,061)
----------- -----------
Net cash used in investing activities (6,044,277) (2,986,061)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 4,600,000 1,231,524
Repayment of debt (2,019,992) (1,556,760)
Distributions to unitholders (3,745,185) (3,745,185)
----------- -----------
Net cash used in financing activities (1,165,177) (4,070,421)
----------- -----------
Increase in cash 2,027 268,448
Cash, beginning of period 366,508 43,546
----------- -----------
Cash, end of period $ 368,535 $ 311,994
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 745,658 $ 684,317
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
<PAGE> 6
JONES INTERCABLE INVESTORS, L.P.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Jones Intercable
Investors, L.P. (the "Partnership") at September 30, 1994 and December 31, 1993
and its Statements of Operations and Cash Flows for the three and nine month
periods ended September 30, 1994 and 1993. Results of operations for these
periods are not necessarily indicative of results to be expected for the full
year.
The Partnership owns and operates the cable television system serving
areas in and around Independence, Missouri (the "Independence System").
(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 and nine month periods ended September 30, 1994 were $345,287 and
$1,026,647, respectively, as compared to $337,428 and $1,017,212, respectively,
for the similar 1993 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent salaries and
related benefits for corporate personnel, rent, data processing services, and
other facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to each partnership
managed. Other overhead costs were allocated primarily based on total revenues
and/or the cost of partnership assets managed. Effective December 1, 1993, the
allocation method was changed to be based only on revenue, which the General
Partner believes provides a more accurate method of allocation. 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 and nine month
periods ended September 30, 1994 were $468,210 and $1,494,340, respectively, as
compared to $465,985 and $1,355,561, respectively, for the similar 1993
periods.
(3) On February 22, 1994, the General Partner and The Jones Group, Ltd., an
affiliate of the General Partner engaged in the cable television system
brokerage business, were named as defendants in a lawsuit brought by three
individuals who are Class A Unitholders in the Partnership. The litigation,
entitled Luva Vaughan et al v. Jones Intercable, Inc. et al, Case No. CV
94-3652 was filed in the Circuit Court for Jackson County, Missouri, and
purports to be "for the use and benefit of" the Partnership. The suit seeks
rescission of the sale of the Alexandria, Virginia cable television system (the
"Alexandria System") by the Partnership to the General Partner, which sale was
completed on November 2, 1992. It also seeks a constructive trust on the
profits derived from the operation of the Alexandria System since the date of
the sale, and seeks an accounting and other equitable relief. The plaintiffs
also allege that the $1,830,850 commission paid to The Jones Group, Ltd. by the
Partnership in connection with such sale was improper, and ask the Court to
order that such commission be repaid to the Partnership. Under the terms of
the partnership agreement of the Partnership, the General Partner has the right
to acquire cable television systems from the Partnership at a purchase price
equal to the average of three independent appraisals of the cable television
system to be acquired. The plaintiffs claim that the appraisals obtained in
connection with the sale of the Alexandria System were improperly obtained,
were not made by qualified appraisers and were otherwise improper. The
purchase price paid by the General Partner upon such sale was approximately
$73,200,000. A portion of the net proceeds received by the Partnership upon
such sale was used to repay a portion of debt outstanding under the
Partnership's credit facility and to make distributions to Class A Unitholders.
The remaining net proceeds were retained by the Partnership for working capital
purposes. The General Partner believes both that the appraisals were properly
obtained and that the brokerage commission was properly paid to The Jones
Group, Ltd. in accordance with the express terms of the partnership agreement.
The General Partner further believes that its defenses are meritorious and it
intends to vigorously defend the litigation. Both the General Partner and The
Jones Group, Ltd. have filed motions to dismiss the litigation on various
grounds and such motions are awaiting ruling by the court.
6
<PAGE> 7
JONES INTERCABLE INVESTORS, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Capital expenditures in the Partnership's Independence System totalled
approximately $6,044,000 during the first nine months of 1994. Approximately
56 percent of these expenditures were for the extension and rebuild of cable
plant. Approximately 14 percent of these expenditures were for the
construction of service drops to subscriber homes. The remaining expenditures
were for various enhancements in the Independence System. Funding for these
expenditures was provided by cash generated from operations. Subject to
Regulation and Legislation as discussed below, anticipated capital expenditures
for the remainder of 1994 are approximately $2,106,000. The rebuild of the
Independence System is expected to account for approximately 71 percent of the
anticipated remaining capital expenditures. The remainder of the expenditures
will relate to various enhancements in the Independence System. The actual
level of capital expenditures will depend, in part, upon the General Partner's
determination as to the proper scope and timing of such expenditures in light
of the FCC's further rulemaking regarding the 1992 Cable Act, and the
Partnership's liquidity position. Funding for these capital improvements is
expected to be provided by cash generated from operations and borrowings from
the Partnership's credit facility.
The maximum amount available under the Partnership's revolving credit
facility is subject to the terms of the credit facility and the partnership
agreement's leverage limitations discussed below. Upon completion of the
Alexandria System sale, the maximum amount available under the Partnership's
revolving credit facility was reduced to $35,000,000. As of September 30,
1994, $21,200,000 was outstanding on this credit facility, leaving $13,800,000
of available borrowings for future needs. Although the revolving credit period
was scheduled to expire on December 31, 1993, the General Partner completed
negotiations in February 1994 to extend the revolving credit period to December
31, 1994. The General Partner intends to seek the extension of the revolving
credit period beyond December 31, 1994. Interest on outstanding principal
balances is at the Partnership's option of the prime rate plus .25 percent, the
CD rate plus 1.25 percent or the Euro-rate plus 1.25 percent. In addition, a
fee of 1/2 percent per annum is required on the unused portion of the
commitment. The effective interest rates on amounts outstanding as of
September 30, 1994 and 1993 were 6.27 percent and 4.55 percent, respectively.
The level of borrowings allowed by the terms of the Partnership's
partnership agreement is limited to 25 percent of the fair market value of the
Partnership's assets at the time of borrowing or 25 percent of the cost of the
Partnership's assets at the time of borrowing, whichever is higher. This
limitation restricts the Partnership's ability to borrow funds for capital
expenditures and to make distributions. In addition, such limitations may
reduce the financial flexibility and liquidity of the Partnership. Further,
the payment of principal and interest on outstanding debt obligations will
diminish the level of funds available to the Partnership and reduce the
financial flexibility of the Partnership. The Partnership's most recent
appraisal of the value of the Independence System was $157,046,000. Based upon
this appraised value, the Partnership has additional borrowing capacity of
approximately $18,061,500, which would allow the Partnership to borrow the
maximum amount currently available under its credit facility.
The Partnership has declared a $.15 per unit distribution for each of
the first, second and third quarters of 1994. The Partnership intends to
distribute all cash flow from operations after payment of expenses, capital
additions, and creation of cash reserves deemed reasonably necessary to
preserve and enhance the value of the Partnership's cable television system.
The General Partner will determine the level of distributions on a
quarter-by-quarter basis. Subject to the regulatory matters discussed below,
the General Partner believes the Partnership has sufficient sources of capital
in its ability to generate cash from operations and to borrow under its credit
facility to meet its presently anticipated needs.
7
<PAGE> 8
Regulation and Legislation
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 allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by the General Partner, 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 reduced rates charged
for certain regulated services effective on September 1, 1993. These initial
reductions resulted in some decrease in revenues and operating income before
depreciation and amortization, however the decrease was not as severe as
originally anticipated. The General Partner undertook actions to mitigate a
portion of these reductions primarily through (a) new service offerings in some
systems, (b) product re-marketing and re-packaging and (c) marketing efforts
directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory
scheme with respect to rates. The FCC's new regulations will 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. However, the FCC held
rate reductions in abeyance in certain systems. 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, 1994 and July 14, 1994.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established
an interim industry-wide 11.25 percent permitted rate of return, and requested
comments on whether this standard and other interim cost-of-service standards
should be made permanent. The FCC also established a presumption that
acquisition costs above a system's book value should be excluded from the rate
base, but the FCC will consider individual showings to rebut this presumption.
The need for special rate relief will also be considered by the FCC if an
operator demonstrates that the rates set by a cost-of-service proceeding would
constitute confiscation of investment, and that, absent a higher rate, the
return necessary to operate and to attract investment could not be maintained.
The FCC will establish a uniform system of accounts for operators that elect
cost-of-service rate regulation, and the FCC has adopted affiliate transaction
regulations. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services will be indexed for inflation, and
operators will also be permitted to increase rates in response to increases in
costs beyond their control, such as taxes and increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
General Partner concluded that the Partnership should elect to file
cost-of-service showings in the Independence System. The General Partner
anticipates no further reduction in revenues or operating income before
depreciation and amortization resulting from the FCC's rate regulations.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on
June 27, 1994 and remanded the case to the district court for further
development of a factual record. The Court's majority determined that the
must-carry rules were content neutral, but that it was not yet proven that the
rules were needed to preserve the economic health of the broadcasting industry.
In the interim, the must-carry rules will remain in place during the pendency
of the proceedings in district court. In 1993, a Federal district court for
the District of Columbia upheld provisions of the 1992 Cable Act concerning
rate regulation, retransmission consent, restrictions on vertically integrated
cable television operators and programmers, mandatory carriage of programming
on commercial leased channels and public, educational and governmental access
channels and the exemption for municipalities from civil damage liability
arising out of local regulation of cable services. The 1992 Cable Act's
provisions providing for multiple ownership limits for cable operators
8
<PAGE> 9
and advance notice of free previews for certain programming services have been
found unconstitutional, and these decisions have been appealed. In November
1993, the United States Court of Appeals for the District of Columbia held that
the FCC's regulations implemented pursuant to Section 10 of the 1992 Cable Act,
which permit cable operators to ban indecent programming on public, educational
or governmental access channels or leased access channels, were
unconstitutional, but the court has agreed to reconsider its decision. All of
these decisions construing provisions of the 1992 Cable Act and the FCC's
implementing regulations have been or are expected to be appealed.
RESULTS OF OPERATIONS
Revenues of the Partnership increased $157,176, or approximately 2
percent, from $6,748,570 for the three months ended September 30, 1993 to
$6,905,746 for the comparable period in 1994. Revenues of the Partnership
increased $188,698, or approximately 1 percent, from $20,344,241 for the nine
months ended September 30, 1993 to $20,532,939 for the comparable period in
1994. The increases in revenue were primarily due to increases in subscribers,
premium service revenue, advertising revenue and installation revenue. These
increases in revenues would have been greater but for the reduction in basic
rates due to regulations issued by the FCC in regard to the 1992 Cable Act.
Basic subscribers increased 4,646, or approximately 6 percent, from 73,777 at
September 30, 1993 to 78,423 at September 30, 1994.
Operating, general and administrative expenses increased $171,354, or
approximately 5 percent, from $3,139,882 for the three month period ending
September 30, 1993 to $3,311,236 for the comparable period in 1994. This
increase was primarily due to increases in personnel costs and programming
costs. This increase was partially offset by a decrease in marketing costs.
For the nine month periods ended September 30, these expenses increased
$555,017, or approximately 6 percent, from $9,541,954 in 1993 to $10,096,971 in
1994. This increase was primarily due to increases in programming costs and
personnel costs, which accounted for approximately 63 percent and 25 percent,
respectively, of the total increase in operating, general and administrative
expense. No other individual factor was significant to the increases in
operating, general and administrative expense in the Partnership's Independence
System. Operating, general and administrative expense represented 48 percent
and 47 percent, respectively, of revenue for the three months periods and 49
percent and 47 percent, respectively, of revenue for the nine month periods
ended September 30, 1994 and 1993.
Management fees and allocated overhead from the General Partner increased
$10,084, or approximately 1 percent, from $803,413 for the three month period
ended September 1993 to $813,497 for the comparable 1994 period. For the nine
months ended September 30, management fees and allocated overhead increased
$148,214, or approximately 6 percent, from $2,372,773 in 1993 to $2,520,987 in
1994. These increases were due primarily to increases in allocated expenses
from the General Partner. The General Partner has experienced increases in
expenses, including personnel expenses and reregulation expenses, a portion of
which is allocated to the Partnership.
For the three month periods, depreciation and amortization expense
decreased $681,423, or approximately 28 percent, from $2,432,281 in 1993 to
$1,750,858 in 1994. For the nine month periods, depreciation and amortization
expense decreased $771,201, or approximately 11 percent, from $7,294,670 in
1993 to $6,523,469 in 1994. These decreases were due to the maturation of the
Independence System's depreciable asset base.
Operating income increased $657,161 to $1,030,155 for the three month
period ended September 30, 1994 compared to $372,994 for the similar period in
1993. Operating income increased $256,668, or approximately 23 percent, to
$1,391,512 for the nine month period ended September 30, 1994 compared to
$1,134,844, for the similar period in 1993. These changes are due to the
factors discussed above. Operating income before depreciation and amortization
decreased $24,262, or approximately 1 percent, from $2,805,275 for the three
months ended September 30, 1993 to $2,781,013 for the similar period
in 1994. Operating income before depreciation and amortization decreased
$514,533, or approximately 6 percent, from $8,429,514 for the nine months ended
September 30, 1993 to $7,914,981 for the similar period in 1994. These
decreases are due to the increases in operating, general and administrative
expense and allocated overhead from the General Partner exceeding the increase
in revenue and the decrease in depreciation and amortization expense. The
decreases in operating income before depreciation and amortization reflect 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 in prior years. In turn, this has caused certain 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 certain costs incurred by the General Partner, which are
allocated to the Partnership, continue to increase. 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, programming fees, reregulation and
competition) that exceed increases in revenue. The General
9
<PAGE> 10
Partner will attempt to mitigate a portion of these reductions through (a) rate
adjustments; (b) new service offerings; (c) product re-marketing and
re-packaging and (d) targeted non-subscriber acquisition marketing.
For the three month periods, interest expense increased $105,696, or
approximately 44 percent, from $242,168 in 1993 to $347,864 in 1994. For the
nine month periods, interest expense increased $155,401, or approximately 21
percent, from $731,307 in 1993 to $886,708 in 1994. These increases are due to
higher outstanding balances on interest-bearing obligations and to higher
interest rates. The effective interest rates on amounts outstanding as of
September 30, 1994 and 1993 were 6.27 percent and 4.55 percent, respectively.
The Partnership recorded net income of $105,448 for the three months
ended September 30, 1993 compared to net income of $670,641 for the similar
period in 1994. The Partnership recorded net income of $406,194 for the nine
months ended September 30, 1993 compared to net income of $437,234 for the
similar period in 1994. These increases are primarily due to the increases in
operating income.
10
<PAGE> 11
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
11
<PAGE> 12
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 INTERCABLE INVESTORS, L.P.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 11, 1994
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- - ------- ----------- ------------
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 368,535
<SECURITIES> 0
<RECEIVABLES> 667,543
<ALLOWANCES> 83,866
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 57,807,838
<DEPRECIATION> (24,448,325)
<TOTAL-ASSETS> 47,670,615
<CURRENT-LIABILITIES> 3,363,621
<BONDS> 21,200,000
<COMMON> 0
0
0
<OTHER-SE> 23,106,994
<TOTAL-LIABILITY-AND-EQUITY> 47,670,615
<SALES> 0
<TOTAL-REVENUES> 20,532,939
<CGS> 0
<TOTAL-COSTS> 19,141,427
<OTHER-EXPENSES> 67,570
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 886,708
<INCOME-PRETAX> 437,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 437,234
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 437,234
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
