<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file numbers 333-35183 and 333-35183-01
JAMES CABLE PARTNERS, L.P.
JAMES CABLE FINANCE CORP.
(Exact name of each Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 38-2778219
Michigan 38-3182724
(State or Other Jurisdiction of Incorporation (I.R.S. Employer Identification No.)
or Organization)
710 North Woodward Avenue, Suite 180 48304
Bloomfield Hills, Michigan (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrants' telephone number, including area code: (248) 647-1080
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. /X/ / /
Yes No
Number of shares of common stock of James Cable Finance Corp. outstanding as of
November 6, 1998: 1,000. James Cable Partners, L.P. does not have a class of
common stock.
* James Cable Finance Corp. meets the conditions set forth in
General Instruction H(1)(a) and (b) to the Form 10-Q and is therefore
filing with the reduced disclosure format.
1
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE NO.
PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Consolidated Financial Statements of James Cable
Partners, L.P. and Subsidiary 3
Notes to Consolidated Financial Statements 7
Balance Sheet of James Cable Finance Corp. 10
Notes to Balance Sheet 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities and Use of Proceeds 20
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
JAMES CABLE PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash & Cash Equivalents $ 4,932,382 $ 9,902,842
Accounts Receivable - Subscribers (Net of allowance for
doubtful accounts of $18,391 in 1998 and $20,872 in 1997) 3,445,652 3,344,345
Prepaid Expenses & Other 299,605 213,816
Property & Equipment:
Cable television distribution systems and equipment 85,215,709 79,248,360
Land and land improvements 229,704 229,704
Buildings and improvements 932,760 932,760
Office furniture & fixtures 1,216,867 1,216,867
Vehicles 3,126,367 3,126,367
------------- -------------
Total 90,721,407 84,754,058
Less accumulated depreciation (74,685,737) (72,086,368)
------------- -------------
Total 16,035,670 12,667,690
Deferred Financing Costs (Net of accumulated amortization of
$681,621 in 1998 and $227,206 in 1997) 3,429,541 3,883,956
Intangible Assets, Net 11,015,823 13,883,699
Deposits 13,232 15,782
------------- -------------
Total Assets $ 39,171,905 $ 43,912,130
============= =============
LIABILITIES & PARTNERS' DEFICIT
Liabilities:
Debt $ 100,000,000 $ 100,000,000
Accounts payable 5,992 245,835
Accrued expenses 2,656,429 2,333,228
Accrued interest on 10-3/4% Senior Notes 1,343,749 4,031,249
Unearned revenue 3,041,707 2,987,979
Subscriber deposits 23,889 25,279
------------- -------------
Total 107,071,766 109,623,570
Commitments and Contingencies (Notes 2 and 3)
Partners' Deficit:
Limited partners (61,582,725) (59,500,005)
General partner (6,317,136) (6,211,435)
------------- -------------
Total (67,899,861) (65,711,440)
------------- -------------
Total Liabilities & Partners' Deficit $ 39,171,905 $ 43,912,130
============= =============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
JAMES CABLE PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three For the Three For the Nine For the Nine
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
---------------- ------------------ ---------------- ----------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 9,415,293 $ 8,922,617 $ 28,142,073 $ 26,728,392
System Operating Expenses (Excluding
Depreciation and Amortization) 4,990,678 4,356,719 14,286,443 12,850,947
Non-System Operating Expenses:
Management fee 475,281 454,097 1,415,766 1,360,792
Other 326,496 142,858 863,215 475,596
---------------- ----------------- ---------------- ----------------
Total non-system operating
expenses 801,777 596,955 2,278,981 1,836,388
Depreciation and Amortization 1,896,981 2,279,428 5,467,246 5,873,724
---------------- ----------------- ---------------- ----------------
Operating Income 1,725,857 1,689,515 6,109,403 6,167,333
Interest and Other:
Interest expense (2,838,971) (2,539,786) (8,516,915) (6,808,247)
Interest income 98,083 52,584 304,404 56,259
Other (28,750) (17,725) (85,313) (204,251)
---------------- ----------------- ---------------- ----------------
Total interest and other (2,769,638) (2,504,927) (8,297,824) (6,956,239)
---------------- ----------------- ---------------- ----------------
Loss before extraordinary item (1,043,781) (815,412) (2,188,421) (788,906)
Extraordinary loss due to debt
refinancing (3,125,012) (3,125,012)
---------------- ----------------- ----------------- ----------------
Net loss $ (1,043,781) $ (3,940,424) $ (2,188,421) $ (3,913,918)
================ ================= ================ ================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
JAMES CABLE PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
------------------- ------------------- -------------------
<S> <C> <C> <C>
Balance, December 31, 1997 $ (59,500,005) $ (6,211,435) $ (65,711,440)
Net loss (unaudited) (2,082,720) (105,701) (2,188,421)
------------------- ------------------- -------------------
Balance, September 30, 1998 (unaudited) $ (61,582,725) $ (6,317,136) $ (67,899,861)
=================== =================== ===================
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
JAMES CABLE PARTNERS, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
September 30, September 30,
1998 1997
------------------- ------------------
(Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (2,188,421) $ (3,913,918)
Adjustments to reconcile net loss to cash flows
from operating activities:
Depreciation 2,599,369 2,125,674
Amortization 2,867,877 3,748,050
Noncash interest expense 454,415 2,391,478
(Increase) Decrease in assets:
Accounts receivable (101,307) 16,133
Prepaid expenses (85,789) (31,713)
Deposits 2,550 2,000
(Decrease) Increase in liabilities:
Accounts payable (239,843) (281,836)
Accrued expenses 323,201 (724,525)
Accrued interest on 10-3/4% Senior Notes (2,687,500) 1,343,749
Unearned revenue 53,728 21,149
Subscriber deposits (1,390) (1,790)
------------------ -----------------
Total adjustments 3,185,311 8,608,369
------------------ -----------------
Cash flows from operating activities 996,890 4,694,451
Cash Flows used in Investing Activities:
Additions to property and equipment (5,967,350) (5,656,642)
------------------ -----------------
Cash flows used in investing activities (5,967,350) (5,656,642)
Cash Flows from Financing Activities:
Principal payments on debt 0 (82,407,796)
Proceeds from debt borrowings 0 100,000,000
Payments on capital lease obligation 0 (66,117)
Deferred financing costs 0 (4,059,847)
Repurchase of warrants 0 (4,400,000)
------------------ -----------------
Cash flows from financing activities 0 9,066,240
------------------ -----------------
Net (Decrease) Increase in Cash and Cash Equivalents (4,970,460) 8,104,049
Cash and Cash Equivalents, Beginning of Period 9,902,842 100,813
------------------ -----------------
Cash and Cash Equivalents, End of Period $ 4,932,382 $ 8,204,862
================== =================
Supplemental Disclosure of Cash Flow Information -
Cash paid for interest during the period $ 10,750,000 $ 5,650,675
================== =================
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
JAMES CABLE PARTNERS, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL - James Cable Partners, L.P. (the "Partnership") was organized
as a Delaware limited partnership in 1988. James Cable Finance Corp., ("Finance
Corp."), a Michigan corporation, is a wholly-owned subsidiary of the Partnership
and was organized on June 19, 1997 for the sole purpose of acting as co-issuer
with the Partnership of $100 million aggregate principal amount of the 10-3/4%
Senior Notes. References to the "Company" herein are to the Partnership and
Finance Corp. consolidated, or to the Partnership prior to the organization of
Finance Corp., as appropriate.
UNAUDITED INTERIM STATEMENTS - The accompanying interim financial
statements and related notes are unaudited, and reflect all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary for a fair presentation of the financial position and
results of operations of the Company for the interim periods. The December 31,
1997 balance sheet data is derived from audited financial statements, but the
notes do not include all disclosures required for audited statements by
generally accepted accounting principles. These interim financial statements
should be read in conjunction with the audited financial statements and related
notes for the year ended December 31, 1997 included in the Company's 1997 Form
10-K/A (Amendment No. 1) filed with the Securities and Exchange Commission. The
results for interim periods are not necessarily indicative of the results for a
full year.
IMPACT OF RECENTLY ADOPTED ACCOUNTING PRINCIPLES - In June 1997,
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" was issued. SFAS No. 131
establishes standards for the way that public business enterprises report
financial and descriptive information about their reporting operating segments.
The Company has not determined the impact on its financial statement disclosure.
SFAS No. 131 is effective for the Company's financial statements for the year
ending December 31, 1998.
(2) REGULATORY MATTERS
The cable television industry is subject to extensive governmental
regulation on the federal, state and local levels (but principally by the
Federal Communications Commission ("FCC") and by local franchising authorities).
Many aspects of such regulation have recently been extensively revised and are
currently the subject of judicial proceedings and administrative rulemakings,
which are potentially significant to the Company. In this regard, the Company
believes that the regulation of cable television systems, including the rates
charged for cable services, remains a matter of interest to Congress, the FCC
and local regulatory officials. There has been a recent increase in calls by
certain members of Congress and FCC officials to maintain or even tighten cable
regulation in the absence of widespread effective competition. Accordingly, no
assurance can be given as to what future actions such parties or the courts may
take or the effect thereof on the Company.
Under the FCC's rate regulations, most cable systems were required to
reduce their basic service and cable programming service tiers ("CPST") rates in
1993 and 1994, and have since had their rate increases governed by a complicated
price cap scheme. Operators also have the opportunity of bypassing this
"benchmark" regulatory scheme in favor of traditional "cost-of-service" in cases
7
<PAGE> 8
where the latter methodology appears favorable. The FCC also established a
vastly simplified cost of service methodology for small cable companies.
The Company, which qualifies as a small cable company under FCC rules, has
elected to rely on the cost-of-service rules as and when the Systems are
required to justify their rates for regulated services and, therefore, has not
implemented the rate reductions that would otherwise have been required if it
were subject to the FCC's benchmarks. Under the cost-of-service rules applicable
to small cable companies, eligible systems can establish permitted rates under a
simple formula that considers total operating expenses (including amortization
expenses), net rate base, rate of return, channel count and subscribers. If the
per channel rate resulting from these inputs for a cable system is no more than
$1.24, the cable system's rates will be presumed reasonable. If the formula
generated rate exceeds the $1.24, the burden is on the cable operator to
establish the reasonableness of its calculations.
Substantially all of the Company's rates are currently under the $1.24 per
channel level, and the Company believes that all of its rates in excess of the
$1.24 per channel level are reasonable using the formula described above.
However, FCC rules permit local franchise authorities to review basic service
rates, and under certain circumstances, challenge CPST rates at the FCC. An
adverse ruling in any such proceeding could require the Company to reduce its
rates and pay refunds. A reduction in the rates it charges for regulated
services or the requirement that it pay refunds could have a material adverse
effect on the Company. Once the maximum permitted rate allowed by FCC rules is
being charged by the Company in regulated communities, future rate increases may
not exceed an inflation-indexed amount, plus increases in certain costs beyond
the cable operator's control, such as taxes, franchise fees and increased
programming costs. The 1996 Telecommunications Act provides for regulation of
the CPST to expire for all cable systems on March 31, 1999. However, certain
members of Congress and FCC officials have called for the delay of this
regulatory sunset and further have urged more rigorous rate regulation
(including limits on programming cost pass-throughs to cable subscribers) until
a greater degree of competition to incumbent cable operators has developed.
In addition, certain provisions of the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") could in the
future have a material adverse effect on the Company's business. In particular,
the 1992 Cable Act conveyed to broadcasters the right generally to elect either
to require (i) the local cable operator to carry their signal or (ii) that such
operator obtain the broadcaster's consent before doing so. To date, compliance
with these provisions has not had a material effect on the Company, although
this result may change in the future depending on such factors as market
conditions, channel capacity and similar matters when such arrangements are
renegotiated.
(3) LEGAL PROCEEDINGS
On October 7, 1997, the City Council of Forsyth, Georgia ("Forsyth"), a
community in which the Company provides service, voted to spend $2.7 million to
build a broadband telecommunications plant in competition with the Company. On
December 2, 1997, Forsyth passed a resolution to sell $3 million in revenue
bonds to finance the proposed project. In order to protect its customer base in
Forsyth and surrounding Monroe County, Georgia ("Monroe County"), the Company
sued Forsyth under the Georgia Open Records Act to force the public disclosure
of various documents concerning, among other things, the feasibility and risk of
Forsyth's proposed project. Forsyth responded by
8
<PAGE> 9
counterclaiming to preliminarily enjoin the Company from seeking further
information under the Georgia Open Records Act and from making further
statements to the public concerning Forsyth's proposed project. At a hearing
before the Superior Court for Monroe County on January 27, 1998, the court
denied Forsyth's motion for preliminary injunction. After the Company moved to
have Forsyth's counterclaim dismissed, Forsyth voluntarily dismissed its
counterclaim. The Company has filed a motion with the court to recover its legal
costs related to Forsyth's counterclaim. A hearing on this motion is pending.
The court has not yet ruled on the Company's request for disclosure of the
documents relating to the City's proposed project.
In February 1998, Forsyth filed an application with the Public Service
Commission ("PSC") of Georgia seeking certification to operate as a competitive
local exchange carrier ("CLEC"). The facilities and services as to which Forsyth
seeks certification would be competitive with the Company's existing and planned
facilities and services. The Company intervened before the PSC to oppose
Forsyth's CLEC application, and appeared at a hearing and filed a brief in
opposition to Forsyth's application. Forsyth's application remains pending
before the PSC.
On July 14, 1998, Forsyth appeared before the Monroe County Development
Authority (the "Authority") to request the Authority to consider preliminarily
the issuance by the Authority of $4.2 million in debt securities to finance
Forsyth's planned broadband telecommunications plant. The Authority agreed to
preliminary consideration of Forsyth's request but twice tabled Forysth's
proposal. Forsyth's proposal will be considered by the Authority at a future
meeting.
On October 6, 1998, Forsyth amended its City Code to modify the definition
of the "downtown development area," within which the Forysth Downtown
Development Authority (the "DDA") is authorized to finance certain projects.
Forsyth has requested that the DDA consider issuing bonds to finance the
proposed broadband telecommunications plant. To the Company's knowledge, the DDA
has not yet considered Forsyth's request.
At September 30, 1998, the Company had 1,704 basic subscribers in the
City of Forsyth and Monroe County franchise areas. This represents approximately
2% of the Company's total basic subscribers and, thus, approximately 2% of the
Company's total cash flow and EBITDA. If the current plans for a competing
system ultimately are implemented, this competition likely would result in a
loss of subscribers to the Company's system and/or make it more difficult for
the Company to maintain its prices for subscriptions to the system.
(4) SUBSEQUENT EVENTS
On July 31, 1998, the Company and Rapid Communications Partners, L.P.
("Rapid") entered into an Asset Purchase Agreement (the "Agreement"), pursuant
to which the Company has agreed to sell its cable television systems in
Tennessee (which encompasses Pickett County, Scott County, Morgan County, Roane
County, Fentress County and Cumberland County) to Rapid for approximately $14.7
million in cash. Consummation of the transactions contemplated by the Agreement,
which is expected to occur no later than February 28, 1999, is subject to
certain conditions (including the approvals of certain cable franchise
authorities). The Company also entered into an amendment to its Bank Credit
Facility that, among other things, increased the Company's permitted total debt
coverage.
9
<PAGE> 10
JAMES CABLE FINANCE CORP.
(A WHOLLY OWNED SUBSIDIARY OF JAMES CABLE PARTNERS, L.P., A DELAWARE LIMITED
PARTNERSHIP)
BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------------- --------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $1,000 $1,000
================ ==============
SHAREHOLDER'S EQUITY
Shareholder's equity - Common stock (1,000 shares issued and outstanding) $1,000 $1,000
================ ==============
</TABLE>
See notes to balance sheet.
10
<PAGE> 11
JAMES CABLE FINANCE CORP.
(A wholly owned subsidiary of James Cable Partners, L.P., a Delaware Limited
Partnership)
NOTES TO THE BALANCE SHEET (UNAUDITED)
(1) ORGANIZATION
James Cable Finance Corp. ("Finance Corp."), a Michigan corporation, is a
wholly-owned subsidiary of James Cable Partners, L.P., A Delaware limited
partnership (the "Partnership"), and was organized on June 19, 1997 for the sole
purpose of acting as co-issuer with the Partnership of $100 million aggregate
principal amount of the 10-3/4% Senior Notes. Finance Corp. has nominal assets
and currently does not have (and it is not expected to have) any material
operations.
(2) STATEMENTS OF OPERATIONS, SHAREHOLDER'S EQUITY AND CASH FLOWS
Since there were no operations in the Finance Corp. for the three months
or nine months ended September 30, 1998, a Statement of Operations, a Statement
of Shareholder's Equity and a Statement of Cash Flows have not been presented.
11
<PAGE> 12
PART I. FINANCIAL INFORMATION
Item 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion of the financial condition and results of
operations of the Company contains certain forward-looking statements relating
to anticipated future financial conditions and operating results of the Company
and its current business plans. In the future, the financial condition and
operating results of the Company could differ materially from those discussed
herein and its current business plans could be altered in response to market
conditions and other factors beyond the Company's control. Important factors
that could cause or contribute to such difference or changes include those
discussed in the Company's Annual Report on Form 10-K/A (Amendment No. 1) for
the fiscal year ended December 31, 1997 under "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations."
OVERVIEW
Revenues. The Company's revenues are primarily attributable to subscription
fees charged to subscribers to the Company's basic and premium cable television
programming services. Basic revenues consist of monthly subscription fees for
all services (other than premium programming and Internet service) as well as
monthly charges for customer equipment rental. Premium revenues consist of
monthly subscription fees for programming provided on a per-channel basis.
Internet revenues consist of monthly subscription fees for Internet access,
modem installation fees and fees for leased lines. In addition, other revenues
are primarily derived from installation and reconnection fees charged to
subscribers to commence or discontinue cable service, late payment fees,
franchise fees, advertising revenues and commissions related to the sale of
goods by home shopping services. At September 30, 1998, the Company had 78,364
basic subscribers and 25,336 premium subscriptions, representing basic
penetration of 60.6% and premium penetration of 32.3% as compared to December
31, 1997 at which time the Company had 78,197 basic subscribers and 24,076
premium subscriptions which represented basic penetration of 60.5% and premium
penetration of 30.8%. At September 30, 1998 the Company had approximately 240
Internet customers using both the Company's high speed, two-way cable modems and
traditional dial-up services.
System Operating Expenses. System operating expenses are comprised of
variable operating expenses and fixed selling, service and administrative
expenses directly attributable to the Company's systems. Variable operating
expenses consist of costs directly attributable to providing cable services to
customers and therefore generally vary directly with revenues. Variable
operating expenses include programming fees paid to suppliers of programming the
Company includes in its basic and premium cable television services, as well as
expenses related to copyright fees, franchise operating fees and bad debt
expenses. Selling, service and administrative expenses directly attributable to
the Company's systems include the salaries and wages of the field and office
personnel, plant operating expenses, office and administrative expenses and
marketing costs.
Non-System Operating Expenses. Non-system operating expenses consist
primarily of general overhead expenses which are not directly attributable to
any one of the Company's systems. These expenses include legal, audit and tax
fees, an incentive bonus accrual for the General Managers of the Company's
systems and amounts paid to its general partner for management expenses.
12
<PAGE> 13
LIQUIDITY AND CAPITAL RESOURCES
General. Liquidity describes the ability to generate sufficient cash flows
to meet the cash requirements of continuing operations which for the Company
includes both day-to-day operating costs (e.g. programming fees, salaries and
marketing) and capital costs (e.g. 750 Mhz upgrades in certain systems) which
allow the Company to remain competitive. In order to provide enough cash to meet
these requirements, the Company relies on both operating revenues (e.g. monthly
fees paid by subscribers for basic and pay services) as well as the debt
financing discussed below. The Company continuously monitors available cash and
cash equivalents in relation to projected cash needs to maintain adequate
balances for current payments while maximizing cash available for investment
opportunities.
Cash Flows from Operating Activities. Cash flows from operating activities
were $1.0 million for the nine months ended September 30, 1998 as compared to
$4.7 million for the nine months ended September 30, 1997. The main reason for
this decrease is due to cash paid for interest. During the nine months ended
September 30, 1997 the Company paid $5.7 million in cash for interest. This
amount increased $5.1 million, to $10.8 million, for the nine months ended
September 30, 1998.
Cash Flows used in Investing Activities. Cash flows used in investing
activities increased $300,000 to $6.0 million for the nine months ended
September 30, 1998 as compared to $5.7 million for the nine months ended
September 30, 1997. The primary reasons for this increase are expenditures
associated with the Company's 750 Mhz upgrade program and certain capital
expenditures made in conjunction with the launching of Internet services in
several of the Company's systems.
Cash Flows from / used in Financing Activities. There were no cash flows
from or used in financing activities for the nine months ended September 30,
1998. Cash flows from financing activities for the nine months ended September
30, 1997 were $9.1 million which is primarily comprised of the following items.
On August 15, 1997 the Company issued, for cash, $100 million of 10-3/4% Series
B Senior Notes due 2004. Amounts then paid from the $100 million proceeds
included $82.4 million to repay the then existing bank credit facility and the
then outstanding subordinated notes, $4.4 million to repurchase certain warrants
attached to the subordinated notes and $4.1 million in deferred financing costs
associated with the issuance of the Senior Notes.
Exchange Notes. Pursuant to an Indenture dated August 15, 1997, the Company
issued, and has outstanding, $100 million of unsecured 10-3/4% Senior Notes due
2004 (the "Exchange Notes"). The Exchange Notes are general senior unsecured
obligations of the Company that mature on August 15, 2004 and rank equally in
right of payment with all other existing and future unsubordinated indebtedness
of the Company and senior in right of payment to any subordinated obligations of
the Company. Interest on the Exchange Notes accrues at the rate of 10-3/4% per
annum and is payable semi-annually in cash arrears on February 15 and August 15,
which commenced on February 15, 1998, to holders of record on the immediately
preceding February 1 and August 1. Interest on the Exchange Notes accrues from
the most recent date to which interest has been paid. Interest is computed on
the basis of a 360-day year comprised of twelve 30-day months. See also the
disclosure appearing herein under "Part II - Other Information - Item 2. Changes
in Securities and Use of Proceeds."
The Bank Credit Facility. Simultaneously with the sale of the Exchange
Notes, the Company entered into a credit agreement (the "Bank Credit Facility")
with Canadian Imperial Bank of Commerce (an affiliate of CIBC Wood Gundy
Securities Corp., an underwriter of the Exchange
13
<PAGE> 14
Notes), and NBD Bank (an affiliate of First Chicago Capital Markets, Inc., an
underwriter of the Exchange Notes) acting as the lenders. The Bank Credit
Facility is a $20 million revolving credit facility (with an option to increase
the amount of credit available thereunder to $30 million) that matures on August
15, 2002. Generally speaking, proceeds under the Bank Credit Facility may be
used (i) to provide for working capital and general corporate purposes, (ii) to
provide for certain permitted repurchases of up to $5 million in the aggregate
of limited partnership interests in the Company, and (iii) to pay transaction
fees and expenses. The Bank Credit Facility requires payments of accrued
interest on a monthly basis throughout the term, with principal due at maturity.
The Bank Credit Facility is secured by a first priority lien on and
security interest in substantially all of the assets of the Company. The Bank
Credit Facility contains certain covenants and provides for certain events of
default customarily contained in facilities of a similar type. The financial
covenants which the Company considers most significant require it to: (a)
maintain an interest coverage ratio (that is, the ratio of annualized six-month
EBITDA to interest expense) of at least 1.1 to 1; (b) maintain a senior debt
ratio (that is, the ratio of debt under the Bank Credit Facility to annualized
six-month EBITDA) of no more than 1.75 to 1; and (c) maintain a ratio of its
total debt to annualized six-month EBITDA of no more than 7.5 to 1. The Company
is in compliance with each of these covenants. As of September 30, 1998 the
covenants contained in the Bank Credit Facility would have limited the Company's
maximum borrowings thereunder to approximately $15 million. As of September 30,
1998 there was no indebtedness outstanding under the Bank Credit Facility.
At September 30, 1998, the Company's total indebtedness was $100.0 million,
its total assets were $39.2 million and its partners' deficit was $67.9 million.
Due to the Company's high degree of leverage: (a) a substantial portion of its
cash flow from operations will be committed to the payment of its interest
expense and will not be available for other purposes; (b) the Company's ability
to obtain additional financing in the future for working capital, capital
expenditures, acquisitions or other purposes may be limited; and (c) the Company
is more highly leveraged than many cable television companies and certain direct
broadcast satellite ("DBS") and telephone companies, which may limit the
Company's flexibility in reacting to changes in its business. However, the
Company believes that it will continue to generate cash or obtain financing
sufficient to meet its requirements for debt service, working capital and
capital expenditures contemplated in the near term and through the maturity of
the Exchange Notes.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship that the various
items bear to revenues for the periods indicated:
14
<PAGE> 15
<TABLE>
<CAPTION>
For the Three Months ended September 30,
1998 1997
---- ----
Amount % Amount %
------ - ------ -
(Dollars in thousands)
<S> <C> <C> <C> <C>
Revenues $ 9,415 100.0% $ 8,923 100.0%
System operating expenses 4,990 53.0% 4,357 48.8%
Non-System operating expenses 802 8.5% 597 6.7%
Depreciation and amortization 1,897 20.2% 2,279 25.5%
--------- --------- ---------- --------
Operating income 1,726 18.3% 1,690 19.0%
Interest expense, net 2,741 29.1% 2,487 27.9%
Other expenses 29 0.3% 18 0.2%
--------- --------- ---------- --------
Loss before extraordinary item (1,044) (11.1%) (815) (9.1%)
Extraordinary loss due to debt
refinancing 0 0.0% 3,125 35.0%
--------- --------- ---------- --------
Net loss $ (1,044) (11.1%) $ (3,940) (44.1%)
========= ========= ========== ========
EBITDA (1) $ 3,623 38.5% $ 3,969 44.5%
</TABLE>
<TABLE>
<CAPTION>
For the Nine Months ended September 30,
1998 1997
---- ----
Amount % Amount %
------ - ------ -
(Dollars in thousands)
<S> <C> <C> <C> <C>
Revenues $ 28,142 100.0% $ 26,728 100.0%
System operating expenses 14,286 50.8% 12,851 48.1%
Non-System operating expenses 2,279 8.1% 1,836 6.9%
Depreciation and amortization 5,468 19.4% 5,874 22.0%
--------- -------- ---------- --------
Operating income 6,109 21.7% 6,167 23.0%
Interest expense, net 8,212 29.2% 6,752 25.3%
Other expenses 85 0.3% 204 0.8%
--------- -------- ---------- --------
Loss before extraordinary item (2,188) (7.8%) (789) (3.1%)
Extraordinary loss due to debt
refinancing 0 0.0% 3,125 11.7%
--------- ------- ---------- --------
Net loss $ (2,188) (7.8%) $ (3,914) (14.8%)
========= ======== ========== ========
EBITDA (1) $ 11,577 41.1% $ 12,041 45.0%
</TABLE>
(1) EBITDA represents operating income before depreciation and amortization.
The Company has included EBITDA data (which are not a measure of financial
performance under Generally Accepted Accounting Principles ("GAAP"))
because it understands such data are used by certain investors to determine
a company's historical ability to service its indebtedness. EBITDA should
not be considered as an alternative to net income as an indicator of the
Company's performance or as an alternative to cash flow as a measure of
liquidity as determined in accordance with GAAP.
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Revenues. Revenues for the three months ended September 30, 1998 increased
by $500,000, or 5.5%, to $9.4 million from $8.9 million for the three months
ended September 30, 1997. Average
15
<PAGE> 16
monthly total revenues per subscriber for the three months ending September 30,
1998 were $40.09, as compared to $38.08 for the same period last year. These
increases are primarily the result of rate increases which the Company
implemented during the fourth quarter of 1997.
Subscribers. At September 30, 1998 the Company had 78,364 subscribers,
which represents a modest increase over the 78,171 subscribers at September 30,
1997. The Company believes this increase is due to a concentrated marketing
effort as well as strategic capital improvements within certain of the Company's
systems.
System Operating Expenses. System operating expenses for the three months
ended September 30, 1998 were $5.0 million, an increase of $600,000, or 14.6%,
over the three months ended September 30, 1997. As a percentage of revenues,
system operating expenses increased 4.2% from 48.8% in 1997, to 53.0% in 1998.
The majority of this increase is due to variable cost increases associated with
higher programming rates and new programming launched in conjunction with rate
increases as well as new costs associated with the Company's launch of its
Internet services. As of the end of the third quarter, the Company had launched
its two-way high speed Internet service in seven of its markets with more
expected during the fourth quarter.
Non-System Operating Expenses. Non-system operating expenses increased
$200,000, or 34.3%, from the three months ended September 30, 1997 to the three
months ended September 30, 1998. The majority of this increase, approximately
$150,000, was attributable to non-recurring charges resulting from legal fees
and costs associated with the potential overbuild in Forsyth, Georgia.
EBITDA. As a result of the foregoing, EBITDA decreased $350,000, or 8.7%,
from $4.0 million for the three months ended September 30, 1997 to $3.6 million
for the three months ended September 30, 1998. Without the non-recurring charges
described in the preceding paragraph, EBITDA for the quarter ended September 30,
1998 was $3.8 million.
Depreciation and Amortization. Depreciation and amortization decreased
$400,000, or 16.8%, from $2.3 million for the three months ended September 30,
1997 to $1.9 million for the three months ended September 30, 1998. The primary
reason for this decrease is a result of certain assets becoming fully
depreciated or amortized.
Interest Expense, Net. Interest expense, net increased $250,000, or 10.2%,
from $2.5 million for the three months ended September 30, 1997 to $2.7 million
for the three months ended September 30, 1998. This is primarily the result of a
change in the Company's debt structure. During the three months ended September
30, 1997 the Company had an average debt balance of approximately $92 million
and an average interest rate of approximately 10.4%, both of which were affected
by the Company's refinancing which took place on August 15, 1997 (See "Part
II-Other Information-Item 2. Changes in Securities and Use of Proceeds."). For
the three months ended September 30, 1998 the Company's average debt balance had
increased to $100 million with an interest rate of 10.75%. These changes in debt
resulted in an increase in interest expense of approximately $300,000 from 1997
to 1998. This was partially offset by an increase in interest revenues of
$50,000 from the three months ended September 30, 1997 to the three months ended
September 30, 1998.
Net Loss. The Company's net loss decreased $2.9 million from $3.9 million
for the three months ended September 30, 1997 to $1.0 million for the three
months ended September 30, 1998. The primary reason for this decrease is the
1997 extraordinary loss due to the refinancing of $3.1 million.
16
<PAGE> 17
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1997
Revenues. Revenues for the nine months ended September 30, 1998 increased
by $1.4 million, or 5.3%, to $28.1 million from $26.7 million for the nine
months ended September 30, 1997. Average monthly total revenues per subscriber
for the nine months ending September 30, 1998 were $39.81, as compared to $37.93
for the same period last year. These increases are primarily the result of rate
increases which the Company implemented during the fourth quarter of 1997.
System Operating Expenses. System operating expenses for the nine months
ended September 30, 1998 were $14.3 million, an increase of $1.4 million, or
11.2%, over the nine months ended September 30, 1997. As a percentage of
revenues, system operating expenses increased 2.7% from 48.1% in 1997, to 50.8%
in 1998. The majority of this increase is due to variable cost increases
associated with higher programming rates and new programming launched in
conjunction with rate increases as well as new costs associated with the
Company's launch of its Internet services. As of the end of the third quarter,
the Company had launched its two-way high speed Internet service in seven of its
markets with more expected during the fourth quarter.
Non-System Operating Expenses. Non-system operating expenses increased
$450,000, or 24.1%, from the nine months ended September 30, 1997 to the nine
months ended September 30, 1998. This increase is primarily due to the
non-recurring costs as previously discussed.
EBITDA. As a result of the foregoing, EBITDA decreased from $12.0 million
for the nine months ended September 30, 1997 to $11.6 million for the nine
months ended September 30, 1998.
Depreciation and Amortization. Depreciation and amortization decreased
$400,000, or 6.9%, from $5.9 million for the nine months ended September 30,
1997 to $5.5 million for the nine months ended September 30, 1998. The primary
reason for this decrease is a result of certain assets becoming fully
depreciated or amortized.
Interest Expense, Net. Interest expense, net increased $1.5 million, or
21.6%, from $6.7 million for the nine months ended September 30, 1997 to $8.2
million for the nine months ended September 30, 1998. This is primarily the
result of a change in the Company's debt structure. During the nine months ended
September 30, 1997 the Company had an average debt balance of approximately $85
million and an average interest rate of approximately 9.8%, both of which were
affected by the Company's refinancing which took place on August 15, 1997 (See
"Part II-Other Information-Item 2. Changes in Securities and Use of Proceeds.").
For the nine months ended September 30, 1998 the Company's average debt balance
had increased to $100 million with an interest rate of 10.75%. These changes in
debt resulted in an increase in interest expense of approximately $1.8 million
from 1997 to 1998. This was partially offset by an increase in interest revenues
of $250,000 from the nine months ended September 30, 1997 to the nine months
ended September 30, 1998.
Net Loss. As a result of the foregoing factors, and due to the 1997
extraordinary loss due to debt refinancing of $3.1 million, the Company's net
loss decreased by $1.7 million from $3.9 million for the nine months ended
September 30, 1997 to $2.2 million for the nine months ended September 30, 1998.
17
<PAGE> 18
EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information" was issued.
SFAS No. 131 establishes standards for the way that public business enterprises
report financial and descriptive information about their reporting operating
segments. The Company has not determined the impact on its financial statement
disclosure. SFAS No. 131 is effective for the Company's financial statements for
the year ending December 31, 1998.
YEAR 2000
The Year 2000 issue impacts the Company in two different areas: (1) The
technical aspects of the Company's business and (2) The Company's accounting and
billing. These two areas are discussed below.
The Company's main line of business is the collection and distribution of
cable television signals. This collection and distribution of cable television
signals involves many electrical and digital components which gather,
unscramble, interpret and send readable signals to the television sets of the
Company's subscribers. For a more complete discussion of the technical aspects
of the Company, see the Company's Annual Report on Form 10-K/A (Amendment No. 1)
for the fiscal year ended December 31, 1997 under "Item 1. Business - Industry
Overview and Technical Overview." Although some of the Company's technical
equipment relies on date recognition, the loss of such equipment in question,
either temporarily or permanently, due to the Year 2000 issue, would not cause a
material disruption in the Company's business and the cost of replacing such
equipment would not be material to the operations of the Company.
The Company's accounting software and its billing operations, both of which
are supplied by third party vendors, are at a greater risk with respect to the
Year 2000 issue. The Company uses third party accounting software for all of its
general ledger, payroll, accounts payable and financial statement purposes.
Currently, such software only requires a two digit entry in the year section of
date entries and, thus, cannot recognize the "20" in the year 2000 and may
instead treat the date as 1900. The Company has received both verbal and written
assurance from the third party vendor that the Year 2000 issue will be corrected
in an update which will be received by the Company prior to January 1, 2000. The
Company also believes that even if a working update is not received, the Year
2000 issues inherent in the accounting software would not have a material effect
on its business operations.
The Company currently uses a third party vendor for its billing and
accounts receivable functions. While the Company does not know the extent of the
Year 2000 issues within this vendors operations, the Company's risk could be
material if its billing operations ceased to exist for an extended period of
time. The Company has received both verbal and written assurance from this
vendor that their internal Year 2000 issues will be corrected prior to January
1, 2000. Also, the Company believes that any loss of its billing or accounts
receivable function could be adequately replaced to avoid a material loss in its
business operations.
Because the Company's main Year 2000 risks are to be corrected by third
party vendors, the cost is expected to be minimal and immaterial to the
Company's operations. The Company believes, based on its discussions with third
party vendors, that it will be Year 2000 compliant prior to
18
<PAGE> 19
January 1, 2000. Also, in the event that either the accounting software or
billing system prove to be non-compliant, the Company believes that it can
rectify the situation so as to prevent the non-compliance from materially
affecting its operations.
Item 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
By virtue of General Instruction 1 to Item 305 of Regulation S-K, and
because it is neither a bank nor a thrift and its market capitalization on
January 28, 1997 did not exceed $2.5 billion, the Company is not required at
this time to provide disclosures under this Item 3.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On October 7, 1997, the City Council of Forsyth, Georgia ("Forsyth"), a
community in which the Company provides service, voted to spend $2.7 million to
build a broadband telecommunications plant in competition with the Company. On
December 2, 1997, Forsyth passed a resolution to sell $3 million in revenue
bonds to finance the proposed project. In order to protect its customer base in
Forsyth and surrounding Monroe County, Georgia ("Monroe County"), the Company
sued Forsyth under the Georgia Open Records Act to force the public disclosure
of various documents concerning, among other things, the feasibility and risk of
Forsyth's proposed project. Forsyth responded by counterclaiming to
preliminarily enjoin the Company from seeking further information under the
Georgia Open Records Act and from making further statements to the public
concerning Forsyth's proposed project. At a hearing before the Superior Court
for Monroe County on January 27, 1998, the court denied Forsyth's motion for
preliminary injunction. After the Company moved to have Forsyth's counterclaim
dismissed, Forsyth voluntarily dismissed its counterclaim. The Company has filed
a motion with the court to recover its legal costs related to Forsyth's
counterclaim. A hearing on this motion is pending. The court has not yet ruled
on the Company's request for disclosure of the documents relating to the City's
proposed project.
In February 1998, Forsyth filed an application with the Public Service
Commission ("PSC") of Georgia seeking certification to operate as a competitive
local exchange carrier ("CLEC"). The facilities and services as to which Forsyth
seeks certification would be competitive with the Company's existing and planned
facilities and services. The Company intervened before the PSC to oppose
Forsyth's CLEC application, and appeared at a hearing and filed a brief in
opposition to Forsyth's application. Forsyth's application remains pending
before the PSC.
On July 14, 1998, Forsyth appeared before the Monroe County Development
Authority (the "Authority") to request the Authority to consider preliminarily
the issuance by the Authority of $4.2 million in debt securities to finance
Forsyth's planned broadband telecommunications plant. The Authority agreed to
preliminary consideration of Forsyth's request but twice tabled Forysth's
proposal. Forsyth's proposal will be considered by the Authority at a future
meeting.
On October 6, 1998, Forsyth amended its City Code to modify the definition
of the "downtown development area," within which the Forysth Downtown
Development Authority (the "DDA") is authorized to finance certain projects.
Forsyth has requested that the DDA consider issuing bonds to finance the
proposed broadband telecommunications plant. To the Company's knowledge, the DDA
has not yet considered Forsyth's request.
19
<PAGE> 20
At September 30, 1998, the Company had 1,704 basic subscribers in the City
of Forsyth and Monroe County franchise areas. This represents approximately 2%
of the Company's total basic subscribers and, thus, approximately 2% of the
Company's total cash flow and EBITDA. If the current plans for a competing
system ultimately are implemented, this competition likely would result in a
loss of subscribers to the Company's system and/or make it more difficult for
the Company to maintain its prices for subscriptions to the system.
Item 2. Changes in Securities and Use of Proceeds
During the fourth quarter of 1997, the Company exchanged an aggregate
principal amount of $100,000,000 of its 10-3/4% Series B Senior Notes due 2004
(the "Notes") for an equal principal amount of its outstanding 10-3/4% Senior
Notes due 2004 (the "Exchange Notes"). The Notes were initially sold by the
Company for cash on August 15, 1997 in transactions not registered under the
Securities Act of 1933, as amended (the "Securities Act") in reliance upon the
exemption provided in Section 4(2) of the Securities Act. The Notes were sold to
CIBC Wood Gundy Securities Corp. and First Chicago Capital Markets, Inc. and
then subsequently resold to qualified institutional buyers in reliance upon Rule
144A under the Securities Act and to a limited number of institutional
accredited investors in a manner exempt from registration under the Securities
Act.
The proceeds to the Company from the sale of the Notes, net of the initial
purchasers' discount of $3.0 million, was $97.0 million (before deducting
expenses payable by the Company, estimated to be $1.1 million). These net
proceeds were used (i) to repay all indebtedness outstanding under the Company's
then existing bank credit facility (approximately $66.7 million), (ii) to repay
the Company's then existing subordinated debt, including additional interest
(approximately $18.1 million), (iii) to repurchase certain warrants previously
issued by the Company in conjunction with its then existing subordinated debt
($4.4 million), and (iv) for general corporate purposes (including capital
expenditures to upgrade certain systems) (approximately $6.7 million). As of
September 30, 1998 all $6.7 million of the amount allocated to general corporate
purposes has been spent on capital expenditures (including upgrading certain
systems).
The Exchange Notes were registered by the Company under the Securities Act
on November 5, 1997 (registration nos. 333-35183 and 333-35183-01). The Exchange
Notes are substantially identical (including principal amount, interest rate,
maturity and redemption rights) to the Notes for which they were exchanged,
except that (i) the offer and sale of the Exchange Notes was registered under
the Securities Act, and (ii) holders of the Exchange Notes are not entitled to
certain rights of holders of the Notes under the Registration Rights Agreement
of the Company dated as of August 15, 1997 (which terminated upon the exchange
of the Exchange Notes for the Notes). Each of the Notes and Exchange Notes were
issued under an indenture dated as of August 15, 1997 among the Company and
United States Trust Company of New York, as trustee. The Company did not receive
any proceeds from the exchange.
The Exchange Notes are general senior unsecured obligations of the Company
that mature on August 15, 2004 and rank equally in right of payment with all
other existing and future unsubordinated indebtedness of the Company and senior
in right of payment to any subordinated obligations of the Company. Interest on
the Exchange Notes accrues at the rate of 10-3/4% per annum and is payable
semi-annually in cash arrears on February 15 and August 15, which commenced on
February 15, 1998, to holders of record on the immediately preceding February 1
and August 1. Interest on the Exchange Notes accrues from the most recent date
to which interest has been paid.
20
<PAGE> 21
Item 5. Other Information
On July 31, 1998, the Company and Rapid Communications Partners, L.P.
("Rapid") entered into an Asset Purchase Agreement (the "Agreement"), pursuant
to which the Company has agreed to sell its cable television systems in
Tennessee (which encompasses Pickett County, Scott County, Morgan County, Roane
County, Fentress County and Cumberland County) to Rapid for approximately $14.7
million in cash. Consummation of the transactions contemplated by the Agreement,
which is expected to occur no later than February 28, 1999, is subject to
certain conditions (including the approvals of certain cable franchise
authorities). The Company also entered into an amendment to its Bank Credit
Facility that, among other things, increased the Company's permitted total debt
coverage.
21
<PAGE> 22
Item 6.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ---------- -----------
<S> <C>
3.1 -- Amended and Restated Agreement of Limited Partnership of James Cable
Partners, L.P. dated as of June 30, 1995*
3.2 -- Certificate of Limited Partnership of James Cable Partners, L.P.*
3.3 -- Articles of Incorporation of James Cable Finance Corp.*
3.4 -- Bylaws of James Cable Finance Corp.*
4.1 -- Indenture dated as of August 15, 1997 among James Cable Partners, L.P., James
Cable Finance Corp., and United States Trust Company of New York, as
Trustee*
4.3 -- Credit Agreement dated as of August 15, 1997 among James Cable Partners,
L.P., the lenders party thereto, NBD Bank, as documentation agent, and
Canadian Imperial Bank of Commerce, as co-agent*
4.4 -- Company Security Agreement dated as of August 15, 1997 between James Cable
Partners, L.P. and NBD Bank, as documentation agent*
4.5 -- Guaranty Agreement dated as of August 15, 1997 by James Cable Finance Corp.
in favor of the Lenders and Agents named therein*
4.6 -- Guarantor Security Agreement dated as of August 15, 1997 between James
Cable Finance Corp. and NBD Bank, as documentation agent*
4.7 -- First Amendment to Credit Agreement dated as of August 5, 1998 among
James Cable Partners, L.P., the lenders party thereto, NBD Bank, as
documentation agent, and Canadian Imperial Bank of Commerce, as
administrative agent**
10.1 -- Securities Purchase Agreement dated as of August 12, 1997 among James Cable
Partners, L.P., James Cable Finance Corp. and the Initial Purchasers*
10.2 -- Registration Rights Agreement dated as of August 15, 1997 among James Cable
Partners, L.P., James Cable Finance Corp. and the Initial Purchasers*
27.1 -- Financial Data Schedule***
</TABLE>
- ---------------------------
22
<PAGE> 23
* Incorporated by reference to the corresponding exhibits to the
Registrants' Registration Statement on Form S-4 (Registration
No. 333-35183).
** Incorporated by reference to the corresponding exhibit to the Company's
Form 10-Q filed for the quarterly period ended June 30, 1998.
*** Filed herewith.
(b) Reports on Form 8-K
None.
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned, thereunto duly authorized.
JAMES CABLE PARTNERS, L.P.
By: James Communications Partners
General Partner
By: Jamesco, Inc.
Partner
Date: November 6, 1998 By: /s/ William R. James
---------------------------------
William R. James
President
By: James Communications Partners
General Partner
By: DKS Holdings, Inc.
Partner
Date: November 6, 1998 By: /s/ Daniel K. Shoemaker
-------------------------------
Daniel K. Shoemaker
President (Principal financial
officer and chief accounting officer)
Date: November 6, 1998
JAMES CABLE FINANCE CORP.
Date: November 6, 1998 By: /s/ William R. James
---------------------------------
William R. James
President
Date: November 6, 1998 By: /s/ Daniel K. Shoemaker
-------------------------------
Daniel K. Shoemaker
Treasurer (Principal financial
officer and chief accounting officer)
24
<PAGE> 25
Exhibit Index
Exhibit Number Description
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000926283
<NAME> JAMES CABLE FINANCE CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 4,932,382
<SECURITIES> 0
<RECEIVABLES> 3,464,043
<ALLOWANCES> 18,391
<INVENTORY> 0
<CURRENT-ASSETS> 8,677,639
<PP&E> 90,721,407
<DEPRECIATION> 74,685,737
<TOTAL-ASSETS> 39,171,905
<CURRENT-LIABILITIES> 7,071,766
<BONDS> 100,000,000
0
0
<COMMON> 0
<OTHER-SE> (67,899,861)
<TOTAL-LIABILITY-AND-EQUITY> 39,171,905
<SALES> 0
<TOTAL-REVENUES> 28,142,073
<CGS> 0
<TOTAL-COSTS> 22,032,670
<OTHER-EXPENSES> (219,091)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,516,915
<INCOME-PRETAX> (2,188,421)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,188,421)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,188,421)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
