<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
--------------- ----------------
Commission File Number: 0-15714
JONES CABLE INCOME FUND 1-C, LTD.
--------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010419
--------------------------------------------------------------------------------
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 (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
<PAGE> 2
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1995 1994
------------ -------------
<S> <C> <C>
CASH $ 677,693 $ 309,848
TRADE RECEIVABLES, less allowance for
doubtful receivables of $66,126 and $37,534
at June 30, 1995 and December 31, 1994,
respectively 385,126 459,412
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 59,905,402 57,707,174
Less - accumulated depreciation (26,933,083) (24,802,632)
----------- ------------
32,972,319 32,904,542
Franchise costs, net of accumulated amortization
of $24,904,349 and $23,207,609 at June 30, 1995
and December 31, 1994, respectively 11,689,441 13,386,181
Subscriber lists, net of accumulated amortization
of $6,943,872 and $6,464,742 at June 30, 1995
and December 31, 1994, respectively 430,288 909,418
Costs in excess of interests in net assets
purchased, net of accumulated amortization
of $1,309,106 and $1,219,184 at June 30, 1995
and December 31, 1994, respectively 5,882,914 5,972,836
Noncompete agreement, net of accumulated
amortization of $244,642 and $230,224 at
June 30, 1995 and December 31, 1994, respectively 93,658 108,076
------------ ------------
Total investment in cable television
properties 51,068,620 53,281,053
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 369,143 495,461
------------ ------------
Total assets $ 52,500,582 $ 54,545,774
============ ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
2
<PAGE> 3
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------------------------------------- ------------- ------------
<S> <C> <C>
LIABILITIES:
Debt $ 43,065,489 $ 42,383,339
Accounts payable--
Trade 6,308 16,153
General Partner 90,143 66,224
Accrued liabilities 1,505,041 1,638,181
Subscriber prepayments 282,560 270,839
------------- ------------
Total liabilities 44,949,541 44,374,736
------------- ------------
MINORITY INTEREST IN JOINT VENTURE 3,044,490 4,086,463
------------- ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner--
Contributed capital 1,000 1,000
Accumulated deficit (196,950) (181,170)
Distributions (113,443) (113,443)
------------- ------------
(309,393) (293,613)
------------- ------------
Limited Partners--
Net contributed capital (85,059 units
outstanding at June 30, 1995 and
December 31, 1994) 34,909,262 34,909,262
Accumulated deficit (17,725,672) (16,163,428)
Distributions (12,367,646) (12,367,646)
------------- ------------
4,815,944 6,378,188
------------- ------------
Total liabilities and partners' capital (deficit) $ 52,500,582 $ 54,545,774
============= ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
3
<PAGE> 4
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1995 1994 1995 1994
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $5,760,706 $ 5,312,929 $11,203,617 $10,492,177
COSTS AND EXPENSES:
Operating expense 2,977,878 2,927,227 6,259,890 5,933,130
Management fees and allocated overhead
from General Partner 670,333 668,441 1,367,298 1,346,795
Depreciation and amortization 2,221,415 2,144,934 4,443,212 4,318,763
---------- ----------- ----------- -----------
OPERATING LOSS (108,920) (427,673) (866,783) (1,106,511)
---------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (906,623) (644,246) (1,775,116) (1,210,217)
Other, net 27,010 (31,804) 21,902 (29,426)
---------- ----------- ----------- -----------
Total other income (expense) (879,613) (676,050) (1,753,214) (1,239,643)
---------- ----------- ----------- -----------
CONSOLIDATED LOSS (988,533) (1,103,723) (2,619,997) (2,346,154)
MINORITY INTEREST IN
CONSOLIDATED LOSS 393,140 438,950 1,041,973 933,065
---------- ----------- ----------- -----------
NET LOSS $ (595,393) $ (664,773) $(1,578,024) $(1,413,089)
========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (5,954) $ (6,648) $ (15,780) $ (14,131)
========== =========== =========== ===========
Limited Partners $ (589,439) $ (658,125) $(1,562,244) $(1,398,958)
========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (6.93) $ (7.74) $ (18.37) $ (16.45)
========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 85,059 85,059 85,059 85,059
========== =========== =========== ===========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
4
<PAGE> 5
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,578,024) $(1,413,089)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,443,212 4,318,763
Minority interest in net loss (1,041,973) (933,065)
Decrease in accrued distribution to Venture Partner -- (429,500)
Amortization of interest rate protection contract 24,250 24,250
Decrease in trade receivables 74,286 15,771
Decrease (increase) in deposits, prepaid expenses
and deferred charges 69,517 (161,654)
Decrease in accounts payable, accrued liabilities
and subscriber prepayments (131,264) (123,784)
Increase (decrease) in advances from General Partner 23,919 (4,068,472)
----------- -----------
Net cash provided by (used in) operating activities 1,883,923 (2,770,780)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,198,228) (2,216,049)
----------- -----------
Net cash used in investing activities (2,198,228) (2,216,049)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 766,530 5,769,120
Repayment of debt (84,380) (80,985)
Decrease in accrued distributions to limited partners -- (650,500)
----------- -----------
Net cash provided by financing activities 682,150 5,037,635
----------- -----------
Increase in cash 367,845 50,806
Cash, beginning of period 309,848 118,807
----------- -----------
Cash, end of period $ 677,693 $ 169,613
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,867,471 $ 1,292,447
=========== ===========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these consolidated statements.
5
<PAGE> 6
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED 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-C, Ltd. (the "Partnership") at June 30, 1995 and December 31, 1994 and its
Statements of Operations for the three and six month periods ended June 30,
1995 and 1994 and its Statements of Cash Flows for the six month periods ended
June 30, 1995 and 1994. Results of operations for these periods are not
necessarily indicative of results to be expected for the full year.
The accompanying financial statements include 100 percent of the
accounts of the Partnership and those of the Brighton, Broomfield and Boulder
County, Colorado; Myrtle Creek, Oregon; Lake County, California; South Sioux
City, Nebraska; and Three Rivers and Watervliet, Michigan cable television
systems reduced by the approximate 40 percent minority interest in Jones Cable
Income Fund 1-B/C Venture (the "Venture"). All interpartnership accounts and
transactions have been eliminated.
(2) Jones Intercable, Inc., a publicly held Colorado corporation (the
"General Partner"), manages the Partnership and the Venture and receives a fee
for its services equal to 5 percent of the gross revenues of the Venture,
excluding revenues from the sale of cable television systems or franchises.
Management fees for the three and six month periods ended June 30, 1995 were
$288,036 and $560,181, respectively, as compared to $265,646 and $524,609,
respectively, for the similar 1994 periods.
The Venture reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid to 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 Venture. Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each partnership managed. Remaining expenses are allocated based on the pro
rata relationship of the Partnership's revenues to the total revenues of all
systems owned or managed by the General Partner and certain of its
subsidiaries. Systems owned by the General Partner and all other systems owned
by partnerships for which Jones Intercable, Inc. is the general partner are
also allocated a proportionate share of these expenses. The General Partner
believes that the methodology used in allocating overhead and administrative
expenses is reasonable. Overhead and administrative expenses allocated to the
Venture by the General Partner for the three and six month periods ended June
30, 1995 were $382,297 and $807,117, respectively, as compared to $402,795 and
$822,186, respectively, for the similar 1994 periods.
6
<PAGE> 7
JONES CABLE INCOME FUND 1-C, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership owns an approximate 60 percent interest in the
Venture. The accompanying financial statements include 100 percent of the
accounts of the Partnership and those of the Venture systems reduced by the 40
percent minority interest in the Venture.
For the six months ended June 30, 1995, the Venture generated net cash
from operating activities totaling $1,883,923, which is available to fund
capital expenditures and non-operating costs. During the first six months of
1995, capital improvements within the Venture's systems totaled approximately
$2,256,000. Approximately 22 percent of these expenditures were for service
drops to homes, approximately 22 percent were for pay security and
approximately 8 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 $2,829,000. System upgrades and rebuilds are expected to account
for approximately 32 percent of the expenditures, and service drops to homes
are expected to account for approximately 21 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.
At June 30, 1995, the Venture's $45,000,000 credit facility had
$42,700,000 outstanding, leaving $2,300,000 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
June 30, 1995 and 1994 were 7.81 percent and 6.16 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's partners primarily from cash generated
through operating activities of the Venture. The Venture's partners in turn
seek to provide quarterly cash distributions to their limited partners. The
Venture's credit facility has a maximum amount available of $45,000,000, of
which $42,700,000 was outstanding on June 30, 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 and second quarters of 1995.
Due to these borrowing limitations, the Venture will need to use cash generated
from operations to fund capital expenditures and the Venture does not
anticipate the resumption of distributions to the Venture partners in the near
term.
The General Partner believes that the Partnership and the Venture have
sufficient sources of capital available from cash generated from operations and
from borrowings available under its credit facility to meet its presently
anticipated needs so long as the Venture does not resume cash distributions.
RESULTS OF OPERATIONS
Revenues of the Venture increased $447,777, or approximately 8
percent, to $5,760,706 from $5,312,929 for the three months ended June 30, 1995
as compared to 1994. For the six month periods ended
7
<PAGE> 8
June 30, 1995 and 1994, revenues increased $711,440, or approximately 7 percent,
to $11,203,617 at June 30, 1995 from $10,492,177 at June 30, 1994. An increase
in the number of basic subscribers combined with basic service rate adjustments
implemented in the Venture's systems primarily accounted for the increase in
revenues. The increase in the number of basic subscribers accounted for
approximately 39 percent and 54 percent of the increase in revenues for the
three and six months ended June 30, 1995 and the basic service rate adjustments
accounted for approximately 35 percent and 26 percent of the increase in
revenues for the similar periods. Since June 30, 1994, the Venture has added
2,910 basic subscribers representing an increase of approximately 5 percent.
Basic subscribers increased to 63,804 at June 30, 1995 from 60,894 at June 30,
1994. This increase in the subscriber base accounted for approximately 35
percent and 41 percent, respectively, of the three and six month increases in
revenues. Increases in advertising sales revenue accounted for approximately 12
percent and 15 percent, respectively, of the three and six month increases in
revenues. No other single factor significantly affected the three and six month
increases in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture'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 $50,651, or approximately 2 percent, to
$2,977,878 from $2,927,227 for the three months ended June 30, 1995 as compared
to 1994. For the six months ended June 30, 1995 and 1994, operating expenses
increased $326,760, or approximately 6 percent, to $6,259,890 at June 30, 1995
from $5,933,130 at June 30, 1994. Operating expenses represented 52 percent
and 56 percent, respectively, of revenue for the three and six month periods
ended June 30, 1995 compared to 55 percent and 57 percent, respectively, for
the similar periods in 1994. Increased programming costs primarily accounted
for the increases in operating expenses, which were partially offset by
decreases in personnel and plant related expenses for the three and six month
periods. No other individual factors were significant to the increases in
operating expenses.
Management fees and allocated overhead from the General Partner
increased $1,892, or less than one percent, to $670,333 from $668,441 for the
three months ended June 30, 1995 as compared to 1994. For the six months ended
June 30, 1995 and 1994, management fees and allocated overhead from the General
Partner increased $20,503, or approximately 2 percent, to $1,367,298 at June
30, 1995 from $1,346,795 at June 30, 1994. These increases are due to the
increases in revenues, upon which such fees and allocations are based, which
were partially offset by a decrease in allocated expenses from the General
Partner.
Depreciation and amortization expense increased $76,481, or
approximately 4 percent, to $2,221,415 for the three months ended June 30, 1995
from $2,144,934, as compared to 1994. For the six months ended June 30, 1995
and 1994, depreciation and amortization expense increased $124,449, or
approximately 3 percent, to $4,443,212 at June 30, 1995 from $4,318,763 at June
30, 1994. These increases were due to the increase in the Venture's
depreciable asset base.
Operating loss decreased $318,753, or approximately 75 percent, to
$108,920 from $427,673 for the three months ended June 30, 1995 as compared to
1994. Operating loss decreased $239,728, or approximately 22 percent, to
$866,783, from $1,106,511 for the six months ended June 30, 1995 as compared to
1994. These decreases are a result of the increase in revenues exceeding the
increases in operating expenses, management fees and allocated overhead from
the General Partner and amortization and depreciation expense. Operating
income before depreciation and amortization increased $395,234, or
approximately 23 percent, to $2,112,495 for the three months ended June 30,
1995 from $1,717,261 for the three months ended June 30, 1994. For the six
month periods, operating income before depreciation and amortization increased
$364,177, or approximately 11 percent, to $3,576,429 in 1995 from $3,212,252 in
1994. These increases are due to the increase in revenues exceeding the
increases in operating expense and management fees and allocated overhead from
the General Partner.
Interest expense increased $262,377, or approximately 41 percent, to
$906,623 from $644,246 for the three months ended June 30, 1995 as compared to
1994. For the six months ended June 30, 1995 and 1994,
8
<PAGE> 9
interest expense increased $564,899, or approximately 47 percent, to $1,775,116
in 1995 from $1,210,217 in 1994. Higher effective interest rates are
responsible for the increase in interest expense.
Net loss decreased $69,380, or approximately 10 percent for the three
month periods ended June 30, 1995 and 1994, to $595,393 in 1995 from $664,773
in 1994. This decrease was due to the factors discussed above. For the six
month periods ended June 30, 1995 and 1994, net loss increased $164,935, or
approximately 12 percent, to $1,578,024 in 1995 from $1,413,089 in 1994. This
increase was due to the factors discussed above and the losses are expected to
continue in the future.
9
<PAGE> 10
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
10
<PAGE> 11
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-C, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /s/ Kevin P. Coyle
-----------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 14, 1995
11
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Exhibit Description Page
----------- ------------------- ----
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 677,693
<SECURITIES> 0
<RECEIVABLES> 451,252
<ALLOWANCES> 66,126
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 59,905,402
<DEPRECIATION> (26,933,083)
<TOTAL-ASSETS> 52,500,582
<CURRENT-LIABILITIES> 4,928,542
<BONDS> 43,065,489
<COMMON> 0
0
0
<OTHER-SE> 4,506,551
<TOTAL-LIABILITY-AND-EQUITY> 52,500,582
<SALES> 0
<TOTAL-REVENUES> 11,203,617
<CGS> 0
<TOTAL-COSTS> 12,070,400
<OTHER-EXPENSES> 1,063,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,775,116
<INCOME-PRETAX> (1,578,024)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,578,024)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,578,024)
<EPS-PRIMARY> (18.37)
<EPS-DILUTED> (18.37)
</TABLE>
