<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 0-17916
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) 792-3111
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 ____
<PAGE> 2
JONES GROWTH PARTNERS L.P.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1995 1994
------------ ------------
<S> <C> <C>
CASH $ 487,310 $ 170,648
TRADE RECEIVABLES, less allowance for doubtful
receivables of $1,648 and $21,597 at June 30, 1995
and December 31, 1994, respectively 80,185 66,829
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 45,094,257 43,210,371
Less- accumulated depreciation (21,689,736) (20,003,575)
------------ ------------
23,404,521 23,206,796
Franchise costs, net of accumulated amortization
of $38,524,703 and $35,174,652 at June 30, 1995 and
December 31, 1994, respectively 21,332,245 24,682,296
Subscriber lists, net of accumulated amortization
of $7,724,947 and $7,053,212 at June 30, 1995 and
December 31, 1994, respectively 1,679,335 2,351,070
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $1,142,677 and
$1,043,313 at June 30, 1995 and December 31,
1994, respectively 6,798,378 6,897,742
------------ ------------
Total investment in cable
television properties 53,214,479 57,137,904
DEPOSITS, PREPAID EXPENSES AND OTHER ASSETS 807,834 942,774
------------ ------------
Total assets $ 54,589,808 $ 58,318,155
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited 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) 1995 1994
------------ ------------
<S> <C> <C>
LIABILITIES:
Credit facility and other debt $ 35,229,992 $ 35,245,699
Trade accounts payable and accrued liabilities 1,582,119 989,457
Accrued interest 305,485 16,780
Subscriber prepayments 118,643 50,301
------------ ------------
Total liabilities 37,236,239 36,302,237
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 1,000 1,000
Accumulated deficit (572,860) (526,237)
------------ ------------
(571,860) (525,237)
------------ ------------
Limited Partners-
Net contributed capital (85,740 units outstanding
at June 30, 1995 and December 31, 1994) 73,790,065 73,790,065
Accumulated deficit (55,864,636) (51,248,910)
------------ ------------
17,925,429 22,541,155
------------ ------------
Total partners' capital (deficit) 17,353,569 22,015,918
------------ ------------
Total liabilities and partners' capital (deficit) $ 54,589,808 $ 58,318,155
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited 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,
------------------------------ ------------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $ 5,407,135 $ 4,897,932 $10,452,316 $ 9,667,422
COSTS AND EXPENSES:
Operating expenses 3,321,705 2,973,074 6,415,704 5,676,153
Management and supervisory fees to the
General Partners and allocated administrative
costs from the Managing General Partner 673,089 611,272 1,361,409 1,305,716
Depreciation and amortization 2,933,919 3,245,000 5,872,187 6,490,001
----------- ----------- ----------- -----------
OPERATING LOSS (1,521,578) (1,931,414) (3,196,984) (3,804,448)
OTHER INCOME (EXPENSE):
Interest expense (701,407) (501,636) (1,410,237) (947,513)
Interest income 4,533 12,046 11,645 21,214
Other, net (61,805) (107,241) (66,773) (117,915)
----------- ----------- ----------- -----------
NET LOSS $(2,280,257) $(2,528,245) $(4,662,349) $(4,848,662)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
Managing General Partner $ (22,803) $ (25,282) $ (46,623) $ (48,487)
=========== =========== =========== ===========
Limited Partners $(2,257,454) $(2,502,963) $(4,615,726) $(4,800,175)
=========== =========== =========== ===========
NET LOSS PER LIMITED PARTNERSHIP
UNIT $ (26.33) $ (29.19) $ (53.83) $ (55.98)
=========== =========== =========== ===========
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 unaudited 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,
-----------------------------
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(4,662,349) $(4,848,662)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 5,872,187 6,490,001
Amortization of interest rate protection contract 32,334 32,334
Decrease (increase) in trade receivables (13,356) 252,615
Decrease in deposits, prepaid expenses and other assets 37,730 43,123
Increase in accounts payable to Jones Intercable, Inc. (28,239) --
Increase in accrued liabilities, accrued interest
and subscriber prepayments 977,948 160,684
----------- -----------
Net cash provided by operating activities 2,216,255 2,130,095
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,883,886) (1,981,443)
----------- -----------
Net cash used in investing activities (1,883,886) (1,981,443)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 36,474 91,922
Repayment of borrowings (52,181) (1,496,319)
----------- -----------
Net cash used in financing activities (15,707) (1,404,397)
----------- -----------
INCREASE (DECREASE) IN CASH 316,662 (1,255,745)
CASH, BEGINNING OF PERIOD 170,648 1,646,850
----------- -----------
CASH, END OF PERIOD $ 487,310 $ 391,105
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,089,199 $ 870,110
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited 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 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 of normal recurring accruals,
necessary to present fairly the financial position of Jones Growth Partners
L.P. (the "Partnership") at June 30, 1995 and December 31, 1994, and its
results of operations for the three month periods ended June 30, 1995 and 1994,
its 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 Partnership owns the cable television system serving the
municipalities of Addison, Glen Ellyn, St. Charles, Warrenville, West Chicago,
Wheaton, Winfield and Geneva, and certain portions of unincorporated areas of
Du Page and Kane counties, all in the State of Illinois (the "Wheaton System").
(2) The Partnership was formed pursuant to a public offering of limited
partnership interests sponsored by Jones Spacelink Cable Corporation (the
"Managing General Partner"). The Managing General Partner was a wholly owned
subsidiary of Jones Spacelink, Ltd. ("Spacelink") until December 20, 1994. On
that date, Jones Intercable, Inc. ("Intercable"), a Colorado corporation that
also was a subsidiary of Spacelink, acquired substantially all of the assets of
Spacelink, including all of the shares of the Managing General Partner. The
Managing General Partner is thus now a wholly owned subsidiary of Intercable.
Intercable is one of the largest cable television multiple system operators in
the United States. The Managing General Partner and certain of its affiliates
also own and operate cable television systems for their own account and for the
account of other managed limited partnerships. The Managing General Partner
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, 1995 were
$270,357 and $522,616, respectively, as compared to $244,897 and $483,371,
respectively, for the three and six month periods ended June 30, 1994. 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, 1995 were $54,071 and $104,523, respectively, as
compared to $48,979 and $96,674, respectively, for the three and six month
periods ended June 30, 1994.
The Partnership reimburses the Managing General Partner and certain of
its affiliates for certain allocated general and administrative costs. These
expenses include salaries and benefits paid to corporate personnel, office rent
and related facilities expense. 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 Managing General Partner and certain of its
affiliates 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 Intercable and certain of
its affiliates. Systems owned by Intercable and all other systems owned by
partnerships for which Intercable is the general partner are also allocated a
proportionate share of these expenses. The Managing General Partner believes
that the methodology used in allocating general and administrative costs is
reasonable. Reimbursements by the Partnership to the Managing General Partner
for allocated general and administrative costs for three and six month periods
ended June 30, 1995 were $348,661 and $734,270, respectively, as compared to
$317,396 and $725,671, respectively, for the three and six month periods ended
June 30, 1994.
(3) Certain prior year amounts have been reclassified to conform to the
1995 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, 1995, the Partnership generated net
cash from operating activities totaling $2,216,255, which is available to fund
capital expenditures and non-operating costs. During the first six months of
1995, the Partnership expended approximately $1,884,000 for capital
expenditures for the Wheaton System. Approximately 54 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 17 percent was for the purchase of pay
security equipment and the remainder of these expenditures was for various
system enhancements. Such expenditures were financed from cash from
operations. Capital expenditures for the remainder of 1995 are expected to be
approximately $1,493,400 and are expected to be financed from available cash
balances and cash flow from operations. For the remainder of 1995,
approximately 50 percent 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.
In December 1994, the Partnership entered into a new $36,000,000
revolving credit facility. The revolving credit facility converts to a term
loan on December 31, 1996, at which time the then-outstanding balance is
payable in quarterly installments through December 30, 2002. At June 30, 1995,
$35,000,000 was outstanding under the new agreement, leaving $1,000,000
available for future needs of the Partnership. Interest on the outstanding
principal balance is at the Partnership's option of Prime plus 1/4 percent or
the London Interbank Offered Rate plus 1-1/4 percent. A fee of 3/8 of one
percent per annum on the unused portion of the commitment is also required. The
effective interest rates on amounts outstanding as of June 30, 1995 and 1994
were 7.44 percent and 4.6 percent, respectively.
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 7 percent for
three years from the date of the agreement.
The Managing General Partner presently believes cash flow from
operations and available borrowings under the Partnership's revolving credit
facility will be sufficient to fund capital expenditures and other liquidity
needs of the Partnership.
RESULTS OF OPERATIONS
Revenues of the Partnership for the three months ended June 30, 1995
totaled $5,407,135, compared to $4,897,932 for the comparable 1994 period, an
increase of $509,203, or approximately 10 percent. For the six months ended
June 30, 1995, revenues totaled $10,452,316 compared to $9,667,422 for the same
period one year ago, an increase of $784,894, or approximately 8 percent.
Increases in basic subscribers accounted for approximately 44 percent and 59
percent, respectively, of the increases in revenue for the three and six month
periods. Basic subscribers increased 3,423, or 7 percent, to 51,111 at June
30, 1995 from 47,688 at June 30, 1994. Basic service rate adjustments
primarily accounted for the remainder of the increases in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership'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 $348,631, or approximately 12 percent,
to $3,321,705 for the three months ended June 30, 1995 from $2,973,074 for the
comparable period in 1994. Operating expenses represented approximately 61
percent of revenues for both the three months ended June 30, 1995 and 1994.
This increase in operating expenses was primarily due to increases in
programming fees, which accounted for approximately 52 percent of the increase.
Operating
7
<PAGE> 8
expenses increased $739,551, or approximately 13 percent, to
$6,415,704 for the six months ended June 30, 1995 from $5,676,153 for the
comparable period in 1994. This increase is due primarily to increases in
programming fees and personnel costs which accounted for approximately 46
percent and 16 percent, respectively, of the increase. No other individual
factor significantly affected the increase in operating expenses for the
periods discussed.
Management and supervisory fees paid to the Managing and Associate
General Partners and allocated administrative costs from the Managing General
Partner increased $61,817, or approximately 10 percent, to $673,089 for the
three month period ended June 30, 1995 from $611,272 for the three month period
ended June 30, 1994. Management and supervisory fees paid to the Managing and
Associate General Partners and allocated administrative costs from the Managing
General Partner increased $55,693, or approximately 4 percent, to $1,361,409
for the six month period ended June 30, 1995 from $1,305,716 for the six month
period ended June 30, 1994. These increases were primarily the result of the
increase in revenues, upon which such fees and allocations are based. The
change of ownership of the Managing General Partner did not have any material
effect on the management fees and allocated administrative costs to the
Partnership.
Operating income before depreciation and amortization expense increased
$53,278, or approximately 4 percent, to $1,412,341 for the three month period
ended June 30, 1995 from $1,313,586 for the comparable period in 1994. This
increase in operating income before depreciation and amortization expense was a
result of the increase in revenues exceeding the increase in operating expenses
described above. Operating income before depreciation and amortization expense
decreased $10,350, or less than 1 percent, to $2,675,203 for the six months
ended June 30, 1995 from $2,685,553 for the comparable period in 1994.
Interest expense increased $199,771, or approximately 40 percent, to
$701,407 for the three months ended June 30, 1995 from $501,636 for the similar
period in 1994. Interest expense increased $462,724, or approximately 49
percent, to $1,410,237 for the six months ended June 30, 1995 from $947,513
for the six months ended June 30, 1994. These increases in interest expense are
primarily due to higher interest rates and higher outstanding balances on
interest bearing obligations during the three and six month periods of 1995 as
compared to the similar period one year ago.
Net loss decreased $247,988, or approximately 10 percent, to $2,280,257
for the three month period ended June 30, 1995 from $2,528,245 for the
comparable period in 1994. Net loss decreased $186,313, or approximately 4
percent to $4,662,349 for the six month period ended June 30, 1995 from
$4,848,662 for the comparable period in 1994. These losses are the result of
the factors discussed above, and are expected to continue in the future.
8
<PAGE> 9
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
9
<PAGE> 10
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.
a Colorado limited partnership
BY: Jones Spacelink Cable Corporation
By: /S/ Kevin P. Coyle
-----------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 14, 1995
10
<PAGE> 11
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> 487,310
<SECURITIES> 0
<RECEIVABLES> 81,833
<ALLOWANCES> (1,648)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 45,094,257
<DEPRECIATION> (21,689,736)
<TOTAL-ASSETS> 54,589,808
<CURRENT-LIABILITIES> 2,006,247
<BONDS> 35,229,992
<COMMON> 0
0
0
<OTHER-SE> 17,353,569
<TOTAL-LIABILITY-AND-EQUITY> 54,589,808
<SALES> 0
<TOTAL-REVENUES> 10,452,316
<CGS> 0
<TOTAL-COSTS> 13,649,300
<OTHER-EXPENSES> (55,128)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,410,237
<INCOME-PRETAX> (4,662,349)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,662,349)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,662,349)
<EPS-PRIMARY> (53.83)
<EPS-DILUTED> (53.83)
</TABLE>
