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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 September 30, 1999
[_] 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: 0-16939
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1069504
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State of organization IRS 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 SPACELINK INCOME/GROWTH FUND 1-A, LTD.
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(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1999 1998
------ -------------- --------------
<S> <C> <C>
Proceeds from sale in interest-bearing escrow account $ 1,056,250 $ 1,000,000
-------------- --------------
Total assets $ 1,056,250 $ 1,000,000
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 118,797 $ 135,696
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Total liabilities 118,797 135,696
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PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Distributions (103,950) (103,950)
Accumulated earnings 102,950 102,950
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- -
-------------- --------------
Limited Partners-
Contributed capital, net of
related commissions, syndication
costs and interest (51,276 units
outstanding at September 30, 1999
and December 31, 1998) 21,875,852 21,875,852
Distributions (30,206,680) (30,206,680)
Accumulated earnings 9,268,281 9,195,132
-------------- --------------
937,453 864,304
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Total liabilities and partners' capital $ 1,056,250 $ 1,000,000
============== ==============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
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(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
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<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
----------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ 2,919,556
COSTS AND EXPENSES:
Operating expenses - - - 1,747,814
Management fees and allocated administrative
costs from the General Partner - - - 327,809
Depreciation and amortization - - - 893,029
------------ ------------ ------------ ------------
OPERATING LOSS - - - (49,096)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (1,992) - (6,654) (288,157)
Interest income on escrowed proceeds 11,250 - 33,750 -
Gain on sale of cable television system - - - 13,106,602
Other, net (4,908) (62,757) 46,053 (66,393)
------------ ------------ ------------ ------------
Total other income (expense), net 4,350 (62,757) 73,149 12,752,052
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 4,350 $ (62,757) $ 73,149 $ 12,702,956
============ ============ ============ ============
ALLOCATION OF NET INCOME (LOSS):
General Partner $ - $ - $ - $ 17,258
============ ============ ============ ============
Limited Partners $ 4,350 $ (62,757) $ 73,149 $ 12,685,698
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ .09 $ (1.22) $ 1.43 $ 247.40
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 51,276 51,276 51,276 51,276
============ ============ ============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
-----------------------------------
1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 73,149 $ 12,702,956
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization - 893,029
Gain on sale of cable television system - (13,106,602)
Decrease in trade receivables, net - 182,946
Increase in deposits, prepaid expenses and other assets (56,250) (163,568)
Decrease in accounts payable and accrued liabilities and
subscriber prepayments and deposits (16,899) (112,125)
--------- ------------
Net cash provided by operating activities - 396,636
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net - (386,202)
Proceeds from sale of cable television system, net of escrow - 22,378,451
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Net cash provided by investing activities - 21,992,249
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of borrowings - (7,620,042)
Distribution to limited partners - (14,915,500)
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Net cash used in financing activities - (22,535,542)
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Decrease in cash - (146,657)
Cash, beginning of period - 146,657
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Cash, end of period $ - $ -
========= ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 326,494
========= ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a complete presentation of the Balance Sheets
and Statements of Operations and Cash Flows in conformity with generally
accepted accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Jones Spacelink
Income/Growth Fund 1-A, Ltd. (the "Partnership") at September 30, 1999 and
December 31, 1998 and its Statements of Operations for the three and nine month
periods ended September 30, 1999 and 1998 and its Statements of Cash Flows for
the nine month periods ended September 30, 1999 and 1998.
The Partnership owned and operated the cable television systems serving the
areas in and around the communities of Bluffton, Decatur, Monroe, Auburn,
Butler, Uniondale, Waterloo, Poneto, Vera Cruz and Garrett, and portions of the
unincorporated areas of Wells, Allen, Noble, Adams and DeKalb Counties, all in
the State of Indiana (the "Northeast Indiana Systems") until they were sold on
June 30, 1998. Jones Intercable, Inc., a publicly held Colorado corporation, is
the "General Partner" and manages the Partnership.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in the General Partner for aggregate consideration of
$706.3 million. Comcast acquired an additional 1.0 million shares of the General
Partner's Class A Common Stock on June 29, 1999 for $50.0 million in a private
transaction. Upon completion of these transactions, Comcast owns approximately
13.8 million shares of the General Partner's Class A Common Stock and
approximately 2.9 million shares of the General Partner's Common Stock,
representing 39.6% of the economic interest and 48.3% of the voting interest in
the General Partner. Comcast has contributed its shares in the General Partner
to its wholly owned subsidiary, Comcast Cable Communications, Inc. ("Comcast
Cable"). The approximately 2.9 million shares of Common Stock owned by Comcast
Cable represent shares having the right to elect approximately 75% of the Board
of Directors of the General Partner. The General Partner is now a consolidated
public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in the
General Partner on April 7, 1999, all of the persons who were executive officers
of the General Partner as of that date terminated their employment with the
General Partner. The General Partner's Board of Directors has elected new
executive officers, each of whom also is an officer of Comcast. As of July 7,
1999, all persons who were employed at the General Partner's former corporate
offices in Englewood, Colorado had terminated their employment with the General
Partner. The General Partner's corporate offices are now located at 1500 Market
Street, Philadelphia, Pennsylvania 19102-2148.
(2) On June 30, 1998, the Partnership sold the Northeast Indiana Systems, its
only remaining operating assets, to an unaffiliated party for a sales price of
$23,500,000. From the sale proceeds, the Partnership repaid all of its
indebtedness, settled working capital adjustments, deposited $1,000,000 into an
interest-bearing indemnity escrow account and distributed remaining net sale
proceeds to its limited partners.
For a period of one year following the closing date, $1,000,000 of the sale
proceeds remained in escrow as security for the Partnership's agreement to
indemnify the buyer under the asset purchase agreement. The escrow period has
expired and the Partnership received the escrowed funds plus interest in October
1999 because no claims were made on the escrowed funds by the buyer. From the
escrowed funds, the Partnership repaid its remaining liabilities, which totaled
$118,797 at September 30, 1999, and it will hold the balance in reserve to cover
the administrative expenses of the Partnership until the Partnership is
liquidated and dissolved. Although the sale of the Northeast Indiana Systems
represented the sale of the only remaining operating assets of the Partnership,
the Partnership will not be dissolved until the pending litigation in which the
Partnership is a named defendant has been resolved and terminated.
(3) The General Partner manages the Partnership and received 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. The General
Partner has not received and will not receive a management fee after June 30,
1998. Management fees paid to the General
5
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Partner by the Partnership for the three and nine month periods ended September
30, 1998 were $-0- and $145,978, respectively.
The Partnership will continue to reimburse the General Partner and certain
of its subsidiaries 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 the Partnership is
dissolved. Such costs were charged to operating costs during the periods that
the Partnership operated its cable television systems. Subsequent to the sale of
the Partnership's final cable television system, such costs were charged to
other expense. Reimbursements made to the General Partner by the Partnership for
overhead and administrative expenses for the three and nine month periods ended
September 30, 1999 were $3,170 and $3,371, respectively, compared to $-0- and
$181,831, respectively, for the similar 1998 periods.
6
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
FINANCIAL CONDITION
- -------------------
On June 30, 1998, the Partnership sold the Northeast Indiana Systems, its
only remaining operating assets, to an unaffiliated party for a sales price of
$23,500,000. From the sale proceeds, the Partnership repaid all of its
indebtedness, settled working capital adjustments, deposited $1,000,000 into an
interest-bearing indemnity escrow account and distributed remaining net sale
proceeds to its limited partners.
For a period of one year following the closing date, $1,000,000 of the sale
proceeds remained in escrow as security for the Partnership's agreement to
indemnify the buyer under the asset purchase agreement. The escrow period has
expired and the Partnership received the escrowed funds plus interest in October
1999 because no claims were made on the escrowed funds by the buyer. From the
escrowed funds, the Partnership repaid its remaining liabilities, which totaled
$118,797 at September 30, 1999, and it will hold the balance in reserve to cover
the administrative expenses of the Partnership until the Partnership is
liquidated and dissolved. Although the sale of the Northeast Indiana Systems
represented the sale of the only remaining operating assets of the Partnership,
the Partnership will not be dissolved until the pending litigation in which the
Partnership is a named defendant has been resolved and terminated.
Because the Partnership has sold all of its assets and no further
distributions are expected to be made, transfers of limited partnership
interests would have no economic or practical value. The General Partner
therefore has determined, in accordance with the authority granted to it under
Section 3.5 of the Partnership's limited partnership agreement, that it will not
process any transfers of limited partnership interests in the Partnership during
the remainder of the Partnership's term.
RESULTS OF OPERATIONS
- ---------------------
Due to the Northeast Indiana Systems sale on June 30, 1998, which were the
Partnership's last remaining operating assets, a discussion of the results of
operations would not be meaningful.
7
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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
8
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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 SPACELINK INCOME/GROWTH FUND 1-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Lawrence S. Smith
-----------------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
-----------------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: November 12, 1999
9
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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 SPACELINK INCOME/GROWTH FUND 1-A, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: ___________________________________
Lawrence S. Smith
Principal Accounting Officer
By: ___________________________________
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: November 12, 1999
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,056,250
<CURRENT-LIABILITIES> 118,797
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 937,453
<TOTAL-LIABILITY-AND-EQUITY> 1,056,250
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (79,803)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,654
<INCOME-PRETAX> 73,149
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,149
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,149
<EPS-BASIC> 1.43
<EPS-DILUTED> 1.43
</TABLE>
