<PAGE> 1
FORM 10-Q/A No. 1
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, 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 0-17916
JONES GROWTH PARTNERS L.P.
------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1143409
- - ----------------------------------------------------------------------------
State of Organization IRS employer I.D. #
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
-----------------------------------------------------------------------
Address of principal executive office
(303) 792-9191
-----------------------------
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X
---
No _______
<PAGE> 2
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1994 1993
------ ------------ ------------
<S> <C> <C>
CASH $ 300,650 $ 1,646,850
TRADE ACCOUNTS RECEIVABLE, NET 69,193 231,353
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 41,717,275 39,735,832
Less- accumulated depreciation (18,031,617) (15,662,764)
----------- -----------
23,685,658 24,073,068
Franchise costs, net of accumulated amortization
of $31,824,601 and $28,474,550 at June 30, 1994
and December 31, 1993, respectively 28,032,347 31,382,398
Subscriber lists, net of accumulated amortization
of $6,381,478 and $5,709,743 at June 30, 1994
and December 31, 1993, respectively 3,022,804 3,694,539
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $943,950 and
$844,586 at June 30, 1994 and December 31,
1993, respectively 6,997,105 7,096,469
----------- -----------
Total investment in cable
television properties 61,737,914 66,246,474
DEPOSITS, PREPAID EXPENSES AND OTHER 855,401 930,858
----------- -----------
Total assets $ 62,963,158 $ 69,055,535
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these balance sheets.
2
<PAGE> 3
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------------------------------------- ------------ ------------
<S> <C> <C>
LIABILITIES:
Credit facility and other debt $ 34,540,265 $ 35,944,662
Trade accounts payable and accrued liabilities 1,309,920 1,199,729
Accrued interest 241,945 196,876
Subscriber prepayments 59,280 53,858
----------- -----------
Total liabilities 36,151,410 37,395,125
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 1,000 1,000
Accumulated deficit (478,279) (429,792)
----------- -----------
(477,279) (428,792)
----------- -----------
Limited Partners-
Contributed capital, net of related
commissions and syndication costs (85,740
units outstanding at June 30, 1994 and
December 31, 1993) 73,790,065 73,790,065
Accumulated deficit (46,501,038) (41,700,863)
----------- -----------
27,289,027 32,089,202
----------- -----------
Total partners' capital (deficit) 26,811,748 31,660,410
----------- -----------
Total liabilities and
partners' capital (deficit) $ 62,963,158 $ 69,055,535
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these balance sheets.
3
<PAGE> 4
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
---------------------------- -----------------------------
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $ 4,897,932 $ 4,997,165 $ 9,667,422 $ 9,797,627
COSTS AND EXPENSES:
Operating, general and administrative 2,973,074 2,717,222 5,676,153 5,506,099
Management and supervisory fees to the
General Partners and allocated administrative
costs from Jones Spacelink, Ltd. 611,272 671,800 1,305,716 1,303,937
Depreciation and amortization 3,245,000 3,217,855 6,490,001 6,431,472
---------- ---------- ---------- ----------
OPERATING LOSS (1,931,414) (1,609,712) (3,804,448) (3,443,881)
OTHER INCOME (EXPENSE):
Interest expense (501,636) (439,026) (947,513) (903,761)
Interest income 12,046 2,961 21,214 7,505
Other, net (107,241) (43,609) (117,915) (84,172)
---------- ---------- ----------- ----------
NET LOSS $(2,528,245) $(2,089,386) $(4,848,662) $(4,424,309)
========== ========== ========== ==========
ALLOCATION OF NET LOSS:
Managing General Partner $ (25,282) $ (20,894) $ (48,487) $ (44,243)
========== ========== =========== ==========
Limited Partners $(2,502,963) $(2,068,492) $(4,800,175) $(4,380,066)
========== ========== ========== ==========
NET LOSS PER LIMITED PARTNERSHIP
UNIT $ (29.19) $ (24,13) $ (55.98) $ (51.09)
========== ========== =========== ==========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 85,740 85,740 85,740 85,740
========== ========== ========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these statements.
4
<PAGE> 5
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
-------------------------------------
1994 1993
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,848,662) $(4,424,309)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 6,490,001 6,431,472
Amortization of interest rate
protection contract 32,334 32,334
Decrease (increase) in trade accounts receivable 252,615 (48,936)
Decrease in deposits, prepaid expenses and other 43,123 (169,679)
Increase (decrease) in accrued liabilities,
accrued interest and subscriber prepayments 160,684 (160,811)
Decrease in accounts payable to Jones Spacelink, Ltd. - (166,931)
----------- ----------
Net cash provided by operating activities 2,130,095 1,493,140
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment (1,981,443) (1,136,858)
----------- ----------
Net cash used in investing activities (1,981,443) (1,136,858)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 91,922 1,115,338
Repayment of borrowings (1,496,319) (253,715)
----------- ----------
Net cash provided by (used in) financing activities (1,404,397) 861,623
----------- ----------
INCREASE (DECREASE) IN CASH (1,255,745) 1,217,905
CASH, AT BEGINNING OF PERIOD 1,646,850 502,716
----------- ----------
CASH, AT END OF PERIOD $ 391,105 $ 1,720,621
=========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 870,110 $ 898,990
=========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these statements.
5
<PAGE> 6
JONES GROWTH PARTNERS L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the Securities and
Exchange Commission 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 of normal
recurring accruals, necessary to present fairly the financial position of Jones
Growth Partners L.P. (the "Partnership") at June 30, 1994 and December 31,
1993, and its results of operations and cash flows for the three and six month
periods ended June 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 the cable television system serving the
municipalities of Addison, Glen Ellyn, St. Charles, Warrenville, West Chicago,
Wheaton, Winfield and Geneva, and certain unincorporated areas of Du Page and
Kane counties, all in the State of Illinois (the "Wheaton System").
(2) Jones Spacelink Cable Corporation (the "Managing General Partner"), a
wholly owned subsidiary of Jones Spacelink, Ltd. ("Spacelink"), manages the
Partnership and receives a fee for its services equal to five percent of the
gross revenues of the Partnership, excluding revenues from the sale of cable
television systems or franchises. Management fees paid to the Managing General
Partner by the Partnership for the three and six month periods ended June 30,
1994 and 1993 were $244,897 and $483,371, respectively, as compared to $249,858
and $489,881, respectively, for the three and six month periods ended June 30,
1993. Growth Partners Inc. (the "Associate General Partner"), an affiliate of
Lehman Brothers Inc., participates with the Managing General Partner in certain
management decisions affecting the Partnership and receives a supervisory fee
of the lesser of one percent of the gross revenues of the Partnership,
excluding revenues from the sale of cable television systems or franchises, or
$200,000, accrued monthly and payable annually. Supervisory fees accrued to
the Associate General Partner by the Partnership for the three and six month
periods ended June 30, 1994 were $48,979 and $96,674, respectively, as compared
to $49,972 and $97,976, respectively, for the three and six month periods ended
June 30, 1993.
The Partnership reimburses Spacelink and certain of its subsidiaries
for certain allocated general and administrative costs. Allocations of
personnel costs are based primarily on actual time spent by employees of
Spacelink and certain of its subsidiaries with respect to each partnership
managed. Remaining expenses are allocated based upon the pro rata relationship
of the Partnership's revenues to the total revenues of all cable television
systems owned or managed by Spacelink and certain of its subsidiaries, and/or
the costs of assets managed for the Partnership. All cable television systems
owned or managed by Spacelink and certain of its subsidiaries are allocated a
proportionate share of these expenses. Included in the costs allocated from
Spacelink and certain of its subsidiaries are expenses allocated to Spacelink
and certain of its subsidiaries from affiliated entities for information
processing and administrative services. The Managing General Partner believes
that the methodology used in allocating general and administrative costs is
reasonable. Reimbursements by the Partnership to Spacelink for allocated
general and administrative costs for the three and six month periods ended June
30, 1994 and 1993 were $317,396 and $725,671, respectively, as compared to
$371,970 and $716,080, respectively, for the three and six month periods ended
June 30, 1993.
(3) Certain prior year amounts have been reclassified to conform to the
1994 presentation.
6
<PAGE> 7
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
For the six months ended June 30, 1994, the Partnership generated
operating income before depreciation and amortization of $2,603,553 and
incurred interest expense totalling $947,513, leaving $1,656,040 to fund
capital expenditures and non-operating costs. During the first six months of
1994, the Partnership spent approximately $1,981,000 for capital expenditures
for its cable television systems serving the communities in and around Wheaton,
Illinois (the "Wheaton System"). Approximately 16 percent of these
expenditures related to cable, hardware and labor for new subscriber
installations, to extend the cable plant to serve additional customers and to
replace equipment. Approximately 43 percent was for the replacement and repair
of converters and the remainder of these expenditures was for various
enhancements. Capital expenditures for the remainder of 1994 are expected to
be approximately $1,106,000 which is expected to be financed principally from
available cash balances and cash flow from operations. However, if such cash
flow is not sufficient to fund this level of capital expenditures, certain
capital expenditures will be delayed. For the remainder of 1994, approximately
82 percent of capital expenditures will relate to cable, hardware and labor to
extend the cable plant, to make additional subscriber installations and to
replace equipment in the Wheaton System. The remainder of the expected capital
expenditures will be for the replacement and repair of converters and for
various other enhancements.
Subject to recent regulation and legislation as described below, the
Managing General Partner presently believes cash flow from operations and cash
balances on hand will be sufficient to fund capital expenditures, debt
principal and interest payments and other liquidity needs of the Partnership
over the near-term. In the fourth quarter of 1994, it most likely will be
necessary for the Partnership to attempt to revise the loan amortization
schedule of its credit agreement to enable the partnership to meet its
liquidity needs.
As of June 30, 1994, $34,310,000 was outstanding under the
Partnership's credit facility. The revolving aspect of the credit facility
expired on June 30, 1993, at which time the outstanding principal converted to
a term loan payable in quarterly installments and it matures on June 30, 1998.
Principal payments totalling $1,460,000 were made in the first half of 1994 on
the term loan. Principal payments totalling $1,460,000 will be due during the
remainder of 1994 on the term loan. On January 12, 1993, the Partnership
entered into an interest rate cap agreement covering outstanding debt
obligations of $20,000,000. The Partnership paid a fee of $194,000 for the
rate cap agreement. The agreement protects the Partnership from LIBOR interest
rates that exceed seven percent for three years from the date of the agreement.
At June 30, 1994, the Partnership was paying an average rate of 4.6 percent on
the total outstanding borrowings under its credit facility.
Regulation and Legislation
On October 5, 1992, 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 effected 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 Spacelink, 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. These regulations, with which the Partnership
complied, became effective on September 1, 1993.
7
<PAGE> 8
In compliance with these rules, the Partnership reduced rates
charged for certain regulated services effective September 1, 1993. These
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 has undertaken 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) targeted
non-subscriber acquisition marketing. To the extent such decreases in revenue
are not mitigated, the value of the Partnership's system, which is calculated
based on cash flow, could be adversely effected.
On February 22, 1994, 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 change in their rates and did not
restructure service offerings between May 15 and July 14.
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
credit 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. The FCC also proposed adopting a productivity factor to be offset
against future inflation increases to be applied regardless of which form of
regulation is used, cost of service or benchmark regulation. 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.
The Partnership has elected to file cost-of-service showings in the
Wheaton System. The Managing General Partner anticipates no further reduction
in revenues or operating income before depreciation and amortization.
The 1992 Cable Act contains new broadcast signal carriage
requirements, and the FCC has adopted regulations implementing the statutory
requirements. These new rules allow a local commercial broadcast television
station to elect whether to demand that a cable system carry its signal or to
require the cable system to negotiate with the station for "retransmission
consent." A cable system is generally required to devote up to one-third of
its activated channel capacity for the mandatory carriage of local commercial
broadcast television stations, and non-commercial television stations are also
given mandatory carriage rights, although such stations are not given the
option to negotiate retransmission consent for the carriage of their signals by
cable systems. Additionally, cable systems also are required to obtain
retransmission consent from all commercial television stations (except for
commercial satellite-delivered independent "superstations") which do not elect
mandatory carriage, commercial radio stations and, in some instances, low-power
television stations carried by cable systems.
The retransmission consent rules went into effect on October 6, 1993.
In the cable television system owned by the Partnership, no television stations
withheld their consent to retransmission of their signal. Certain broadcast
signals are being carried pursuant to extensions, and the Managing General
Partner expects to finally conclude retransmission consent negotiations with
those remaining stations without having to terminate the distribution of any of
those signals. However, there can be no assurance that such will occur. If
any broadcast station currently being carried pursuant to an extension is
dropped, there could be a negative impact on the system in which it is dropped
if a significant number of subscribers in such system were to disconnect their
service. However, in most cases, only one broadcaster in any market is being
carried pursuant to an extension arrangement, and the dropping of such
broadcaster, were that to occur, is not expected to have a negative impact on
the system.
8
<PAGE> 9
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 and a decision is expected in the next several months. 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 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.
These new factors, as well as other economic and industry
considerations, will affect the Managing General Partner's and Associate
General Partner's determination of the appropriate time for the sale of the
Partnership's assets, consistent with the Partnership's investment objectives.
In October 1993, the Managing General Partner had the Wheaton System appraised
by an independent appraiser, which estimated the fair market value to be
approximately $83,973,000. The Partnership believes that fair market value of
the Wheaton System may decline in the near term and has no intention to sell
the Wheaton System in the near term. However, the Partnership believes that
market conditions and the Wheaton System's operating cash flow will improve
over the long term and the fair market value of the Wheaton System ultimately
will appreciate in value, however there is no assurance of such anticipated
appreciation.
Results of Operations
Revenues of the Partnership for the three months ended June 30, 1994
totalled $4,897,932, compared to $4,997,165, for the comparable 1993 period, a
decrease of $99,233, or approximately two percent. For the six months ended
June 30, 1994, revenues totalled $9,667,422 compared to $9,797,627 for the same
period one year ago, a decrease of $130,205, or approximately one percent. The
decrease in revenues for the six month period ended June 30 1994, was due to a
decrease in basic service revenues, which was partially offset by increases in
advertising revenues, installation fees and pay-per-view revenues. The
decrease in basic service revenues can be attributed primarily to a decrease in
the basic service rate due to the new FCC rate regulations, which took effect
September 1, 1993. The decrease in basic service revenues was partially offset
by an increase in the number of basic subscribers. No other single factor
significantly affected the decrease in total revenues. This decrease is due to
the decrease in revenues, upon which such fees and allocations are based, and a
decrease in expenses allocated from Spacelink.
Operating, general and administrative expenses increased $255,852, or
approximately 9 percent, from $2,717,222 for the three months ended June 30,
1993 to $2,973,074 for the comparable period in 1994. Operating, general and
administrative expenses represented approximately 61 percent and 54 percent,
respectively, of revenues for the three months ended June 30, 1994 and 1993.
The three month increase in operating, general and administrative expenses was
primarily the result of increases in personnel related costs and marketing
related costs and was partially offset by decreases in copyright fees and plant
related costs. Operating, general and administrative expenses increased
$170,054, or approximately 3 percent, from $5,506,099 for the six months ended
June 30, 1993 to $5,676,153 for the comparable
9
<PAGE> 10
period in 1994. Operating, general and administrative expenses represented
approximately 59 percent and 56 percent, respectively, of revenues for the six
months ended June 30, 1994 and 1993. The total increase in operating, general
and administrative expenses for the six month periods was the result of
increases in advertising related costs and programming related costs which
increases were partially offset by decreases in copyright fees, marketing
expense and plant expense. No other individual factor significantly affected
the increases in operating, general and administrative expenses for the periods
discussed.
Management and supervisory fees from the Managing and Associate
General Partners and allocated administrative costs from Spacelink decreased
$60,528, or approximately 9 percent, from $671,800 for the three month period
ended June 30, 1993 to $611,272 for the three month period ended June 30, 1994.
This decrease is due to the decrease in revenues, upon which such fees and
allocations are based, and a decrease in expenses allocated from Spacelink due
to an adjustment in the allocation method. Management and supervisory fees
from the Managing and Associate General Partners and allocated administrative
costs from Spacelink increased $1,779 from $1,303,937 for the six month period
ended June 30, 1993 to $1,305,716 for the six month period ended June 30, 1994.
Operating income before depreciation and amortization expense
decreased $294,557, or approximately 18 percent, from $1,608,143 for the three
month period ended June 30, 1993 to $1,313,586 for the comparable period in
1994. Operating income before depreciation and amortization expense decreased
$302,038, or approximately 10 percent, from $2,987,591 for the six months ended
June 30, 1993 to $2,685,553 for the comparable period in 1994. These decreases
in operating income before depreciation and amortization expense are primarily
a result of the decreases in revenues and increases in operating, general and
administrative expenses. 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 decrease. In turn, this has caused certain expenses which
are a function of revenue, such as franchise fees, copyright fees and
management fees to decrease. However, other operating costs such as
programming fees, salaries and benefits, and marketing costs as well as certain
costs incurred by the Managing 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 Managing General 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.
Interest expense increased $62,610, or approximately 14 percent, from
$439,026 for the three months ended June 30, 1993 to $501,636 for the similar
period in 1994. Interest expense increased $43,752, or approximately 5
percent, from $903,761 for the six months ended June 30, 1993 to $947,513 for
the six months ended June 30, 1994. These increases in interest expense are
primarily due to higher average interest rates charged on interest bearing
obligations during the three and six month periods of 1994 as compared to the
similar period one year ago.
Net loss increased $438,859, or approximately 21 percent, from
$2,089,386 for the three month period ended June 30, 1993 to $2,528,245 for the
comparable period in 1994. Net loss increased $424,353, or approximately 10
percent from $4,424,309 for the six month period ended June 30, 1993 to
$4,848,662 for the comparable period in 1994. These losses are the result of
the factors discussed above and are expected to continue.
10
<PAGE> 11
PART II - OTHER INFORMATION
NONE
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES GROWTH PARTNERS L.P.
BY: JONES SPACELINK CABLE
CORPORATION, its Managing
General Partner
By: /S/Jay B. Lewis
Jay B. Lewis
Controller
(Principal Financial
and Accounting Officer)
Dated: August 26, 1994
12
