FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1997
------------------
[ ] 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: 0-14906
JONES CABLE INCOME FUND 1-B, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1010417
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
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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
----- -----
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
September 30, December 31,
ASSETS 1997 1996
------ ------------- ------------
CASH $ 145 $ 145
INVESTMENT IN CABLE TELEVISION JOINT VENTURE 2,457,005 1,162,877
------------ -----------
Total assets $2,457,150 $ 1,163,022
============ ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital $ 1,000 $ 1,000
Accumulated earnings 106,691 96,162
Distributions (110,219) (110,219)
------------ -----------
(2,528) (13,057)
------------ -----------
Limited Partners-
Net contributed capital (83,884 units
outstanding at September 30, 1997
and December 31, 1996) 34,449,671 34,449,671
Accumulated deficit (2,902,052) (10,151,011)
Distributions (29,087,941) (23,122,581)
------------ -----------
2,459,678 1,176,079
------------ -----------
Total liabilities and partners'
capital (deficit) $ 2,457,150 $ 1,163,022
============ ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- --------------------------
1997 1996 1997 1996
------------ --------- ----------- -----------
REVENUES $ - $ - $ - $ 862,911
COSTS AND EXPENSES:
Operating expenses - - - 730,908
Management fees and allocated
overhead from General Partner - - - 106,575
Depreciation and amortization - - - 227,488
------------ --------- ----------- -----------
OPERATING LOSS - - - (202,060)
------------ --------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense - - - (123,888)
Gain on sale of cable television system - - - 11,122,663
Other, net - 5,820 - 135,637
------------ --------- ----------- -----------
Total other income (expense), net - 5,820 - 11,134,412
------------ --------- ----------- -----------
INCOME BEFORE EQUITY IN NET
INCOME (LOSS) OF CABLE
TELEVISION JOINT VENTURE - 5,820 - 10,932,352
EQUITY IN NET INCOME (LOSS) OF
CABLE TELEVISION JOINT
VENTURE (14,532) (196,481) 7,259,488 (903,573)
------------ --------- ----------- -----------
NET INCOME (LOSS) $ (14,532) $(190,661) $7,259,488 $10,028,779
============ ========= =========== ===========
ALLOCATION OF NET INCOME (LOSS):
General Partner $ (15) $ (1,907) $ 10,529 $ 298,180
============ ========= =========== ===========
Limited Partners $ (14,517) $(188,754) $7,248,959 $ 9,730,599
============ ========= ========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (.17) $ (2.25) $ 86.42 $116.00
============ ========= =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 83,884 83,884 83,884 83,884
============ ========= =========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
For the Nine Months Ended
September 30,
---------------------------
1997 1996
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,259,488 $ 10,028,779
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization - 227,488
Equity in net loss (income) of cable television
joint venture (7,259,488) 903,573
Gain on sale of cable television system - (11,122,663)
Decrease in trade receivables - 247,500
Decrease in deposits, prepaid expenses
and deferred charges - 48,919
Decrease in accrued liabilities and
subscriber prepayments - (357,575)
----------- ------------
Net cash used in operating activities - (23,979)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net - (156,802)
Proceeds from the sale of cable television system - 18,347,667
Distributions from cable television joint venture 5,965,360 -
----------- ------------
Net cash provided by investing activities 5,965,360 18,190,865
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 18,135
Repayment of debt - (6,884,281)
Distributions to limited partners (5,965,360) (11,104,875)
Decrease in accrued distributions - (250,000)
----------- ------------
Net cash used in financing activities (5,965,360) (18,221,021)
----------- ------------
Decrease in cash - (54,135)
Cash, beginning of period 145 54,135
----------- ------------
Cash, end of period $ 145 $ -
=========== ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 220,221
=========== ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data includes
all adjustments, consisting only of normal recurring accruals, necessary to
present fairly the financial position of Jones Cable Income Fund 1-B, Ltd. (the
"Partnership") at September 30, 1997 and December 31, 1996, its results of
operations for the three and nine month periods ended September 30, 1997 and
1996 and its cash flows for the nine month periods ended September 30, 1997 and
1996. Results of operations for these periods are not necessarily indicative of
results to be expected for the full year.
Jones Intercable, Inc. ("Intercable"), a publicly held Colorado
corporation, is the "General Partner."
The Partnership owns a 40 percent interest in Jones Cable Income Fund 1-B/C
Venture (the "Venture"). The Venture owns and operates the cable television
systems serving Lake County, California (the "Clearlake System"); Myrtle Creek,
Oregon; South Sioux City, Nebraska; and Three Rivers and Watervliet, Michigan.
The Venture also owned and operated the cable television system serving the
areas in and around Brighton, Broomfield and Boulder County, Colorado (the
"Colorado Systems") until their sale on January 24, 1997.
(2) On January 24, 1997, the Venture sold the Colorado Systems to an
unaffiliated party for a sales price of $35,000,000. The Venture distributed a
total of $15,000,000 to the Partnership and Jones Cable Income Fund 1-C, Ltd.
("Fund 1-C") in February 1997, which amount represents the net sale proceeds
following the Venture's repayment of a portion of the balance outstanding on its
credit facility and the payment of a brokerage fee to The Jones Group, Ltd., a
subsidiary of Intercable ("The Jones Group"), totaling $875,000, representing
2.5 percent of the sales price, for acting as a broker in this transaction. The
Partnership received $5,965,360 and Fund 1-C received $9,034,640 of such
distribution. The Partnership, in turn, distributed the $5,965,360
(approximately $142 per each $1,000 invested in the Partnership) to the limited
partners of the Partnership. Because the distribution to the limited partners of
the Partnership together with all prior distributions did not return the amount
initially contributed by the limited partners to the Partnership plus the
preferred return provided by the Partnership's limited partnership agreement,
the General Partner did not receive a general partner distribution from the sale
proceeds. Because the sale of the Colorado Systems did not represent a sale of
all or substantially all of the Partnership's assets, no vote of the limited
partners of the Partnership was required to approve this sale.
The pro forma effect of the sale of the Colorado Systems on the results of
the Venture's operations for the nine months ended September 30, 1997 and 1996,
assuming the transaction had occurred at the beginning of the year, is presented
in the following unaudited tabulation:
For the Nine Months Ended September 30, 1997
--------------------------------------------
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------ ------------
Revenues $13,867,189 $ (532,005) $13,335,184
=========== ============ ===========
Operating Income $ 503,217 $ 314,136 $ 817,353
=========== ============ ===========
Net Income $18,253,679 $(17,620,983) $ 632,696
=========== ============ ===========
5
For the Nine Months Ended September 30, 1996
--------------------------------------------
Unaudited
Pro Forma Unaudited
As Reported Adjustments Pro Forma
----------- ------------ -----------
Revenues $18,318,617 $ (5,635,638) $12,682,979
=========== ============ ===========
Operating Income (Loss) $ 38,591 $ (68,400) $ (29,809)
=========== ============ ===========
Net Loss $(2,271,997) $ 947,500 $(1,324,497)
=========== ============ ===========
(3) On September 17, 1997, the Venture entered into an asset purchase agreement
providing for the sale of the Clearlake System by the Venture to an unaffiliated
party for a sales price of $21,400,000, subject to normal closing adjustments.
The closing of this transaction, which is expected to close in late 1997 or
early 1998, is subject to the consents of governmental authorities and other
third parties. Upon the consummation of the proposed sale of the Clearlake
System, the Venture will pay a brokerage fee to The Jones Group totaling
approximately $535,000, will repay a portion of the Venture's then-outstanding
balance of its credit facility and then the Venture will distribute the net sale
proceeds of approximately $11,000,000 to the Partnership and Fund 1-C. The
Partnership will receive approximately $4,374,700 and Fund 1-C will receive
approximately $6,625,300 of such distribution. The Partnership, in turn, will
distribute the $4,374,700 (approximately $105 per each $1,000 invested in the
Partnership) to the limited partners of the Partnership. This distribution,
together with all prior distributions, will give the Partnership's limited
partners a return of approximately $839 for each $1,000 invested in the
Partnership. Because the expected distribution to the limited partners of the
Partnership together with all prior distributions will not return the amount
initially contributed by the limited partners to the Partnership plus the
preferred return provided by the Partnership's limited partnership agreement,
the General Partner will not receive a general partner distribution from the
sale proceeds. Because the sale of the Clearlake System does not represent a
sale of all or substantially all of the assets of the Partnership, no vote of
the limited partners of the Partnership is required to approve this sale.
Following this sale, the Venture will continue to own and operate its systems in
Oregon, Nebraska and Michigan.
(4) The General Partner manages the Partnership and receives a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Management
fees for the three and nine month periods ended September 30, 1997 (exclusive of
the Partnership's 40 percent interest in the Venture) were $-0- and $-0-
compared to $-0- and $43,146, respectively, for the similar 1996 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
related benefits paid for corporate personnel, rent, data processing and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operations of the Partnership and would have been incurred by the Partnership if
it was a stand alone entity. Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner with respect to each
partnership managed. Remaining overhead costs are allocated based on revenues
of the Partnership as a percentage of total revenues of owned and managed cable
television systems of the General Partners. Systems owned by the General
Partner and all other systems owned by partnerships for which Intercable is the
general partner are also allocated a proportionate share of these expenses. The
General Partner believes that the methodology used in allocating overhead and
administrative expenses is reasonable. Amounts charged the Partnership by the
General Partner for allocated overhead and administrative expenses for the three
and nine month periods ending September 30, 1997 (exclusive of the Partnership's
40 percent interest in the Venture) were $-0- and $-0- compared to $-0- and
$63,429, respectively, for the similar 1996 periods.
6
(5) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
ASSETS September 30, 1997 December 31, 1996
------ ------------------- ------------------
Cash and accounts receivable $ 615,448 $ 1,232,665
Investment in cable television properties 29,773,265 45,932,002
Other assets 907,575 391,576
------------ ------------
Total assets $ 31,296,288 $ 47,556,243
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Debt $ 23,706,752 $ 42,559,250
Accounts payable and accrued liabilities 1,516,056 2,062,084
Partners' contributed capital, net 24,373,778 39,504,008
Accumulated deficit (18,300,298) (36,569,099)
------------ ------------
Total liabilities and partners' capital $ 31,296,288 $ 47,556,243
============ ============
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ---------------------------
1997 1996 1997 1996
------------- ------------- ------------- ------------
Revenues $4,513,647 $6,200,872 $13,867,189 $18,318,617
Operating expenses 2,333,184 3,409,393 7,799,531 10,166,199
Management fees and allocated overhead
from Jones Intercable, Inc. 476,874 671,382 1,521,950 2,084,393
Depreciation and amortization 1,323,160 1,844,988 4,042,491 6,029,434
---------- ---------- ----------- -----------
Operating income (loss) 380,429 275,109 503,217 38,591
Interest expense (337,578) (771,773) (1,047,954) (2,331,270)
Gain on sale of cable television system - - 18,889,257 -
Other, net (79,392) 2,619 (90,841) 20,682
---------- ---------- ----------- -----------
Net income (loss) $ (36,541) $ (494,045) $18,253,679 $(2,271,997)
========== ========== =========== ===========
Management fees paid to Intercable by the Venture totaled $225,682 and
$693,359, respectively, for the three and nine months ended September 30, 1997
compared to $310,044 and $915,931, respectively, for the similar 1996 periods.
Reimbursements for overhead and administrative expenses totaled $251,192 and
$828,591, respectively, for the three and nine months ended September 30, 1997
compared to $361,338 and $1,168,462, respectively, for the similar 1996 periods.
Management fees paid by the Venture and attributable to the Partnership totaled
$89,753 and $185,995, respectively, for the three and nine months ended
September 30, 1997 compared to $123,304 and $364,265, respectively, for the
similar 1996 periods. Reimbursements for overhead and administrative expenses
attributable to the Partnership totaled $99,899 and $329,530, respectively, for
the three and nine months ended September 30, 1997 compared to $143,704 and
$464,697, respectively, for the similar 1996 periods.
7
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
It is the General Partner's publicly announced policy that it intends to
liquidate its managed partnerships, including the Partnership, as opportunities
for sales of partnership cable television systems arise in the marketplace over
the next several years. In accordance with the General Partner's policy, the
Partnership sold the Orangeburg System in February 1996 and the Venture sold the
Colorado Systems in January 1997, and has entered into an asset purchase
agreement to sell its Clearlake System. There can be no assurance as to the
timing or terms of any sale.
The Partnership continues to own a 40 percent interest in the Venture. The
investment is accounted for under the equity method. When compared to the
December 31, 1996 balance, this investment has increased by $1,294,128. This
increase represents the Partnership's proportionate share of net income,
resulting from the sale of the Colorado Systems, partially offset by
distributions, during the first nine months of 1997.
On January 24, 1997, the Venture sold the Colorado Systems to an
unaffiliated party for a sales price of $35,000,000. The Venture distributed a
total of $15,000,000 to the Partnership and Fund 1-C in February 1997, which
amount represents the net sale proceeds following the Venture's repayment of a
portion of the balance outstanding on its credit facility and the payment of a
brokerage fee to The Jones Group totaling $875,000, representing 2.5 percent of
the sales price, for acting as a broker in this transaction. The Partnership
received $5,965,360 and Fund 1-C received $9,034,640 of such distribution. The
Partnership, in turn, distributed the $5,965,360 (approximately $142 per each
$1,000 invested in the Partnership) to the limited partners of the Partnership.
Because the distribution to the limited partners of the Partnership together
with all prior distributions did not return the amount initially contributed by
the limited partners to the Partnership plus the preferred return provided by
the Partnership's limited partnership agreement, the General Partner did not
receive a general partner distribution from the sale proceeds. Because the sale
of the Colorado Systems did not represent a sale of all or substantially all of
the Partnership's assets, no vote of the limited partners of the Partnership was
required to approve this sale.
On September 17, 1997, the Venture entered into an asset purchase agreement
providing for the sale of the Clearlake System by the Venture to an unaffiliated
party for a sales price of $21,400,000, subject to normal closing adjustments.
The closing of this transaction, which is expected to close in late 1997 or
early 1998, is subject to the consents of governmental authorities and other
third parties. Upon the consummation of the proposed sale of the Clearlake
System, the Venture will pay a brokerage fee to The Jones Group totaling
approximately $535,000, will repay a portion of the Venture's then-outstanding
balance of its credit facility and then the Venture will distribute the net sale
proceeds of approximately $11,000,000 to the Partnership and Fund 1-C. The
Partnership will receive approximately $4,374,700 and Fund 1-C will receive
approximately $6,625,300 of such distribution. The Partnership, in turn, will
distribute the $4,374,700 (approximately $105 per each $1,000 invested in the
Partnership) to the limited partners of the Partnership. This distribution,
together with all prior distributions, will give the Partnership's limited
partners a return of approximately $839 for each $1,000 invested in the
Partnership. Because the expected distribution to the limited partners of the
Partnership together with all prior distributions will not return the amount
initially contributed by the limited partners to the Partnership plus the
preferred return provided by the Partnership's limited partnership agreement,
the General Partner will not receive a general partner distribution from the
sale proceeds. Because the sale of the Clearlake System does not represent a
sale of all or substantially all of the assets of the Partnership, no vote of
the limited partners of the Partnership is required to approve this sale.
Following this sale, the Venture will continue to own and operate its systems in
Oregon, Nebraska and Michigan.
During the first nine months of 1997, capital expenditures within the
Venture's systems totaled approximately $2,983,000. Approximately 41 percent of
these expenditures was for the construction of service drops to subscribers'
homes and approximately 24 percent of these expenditures was for the
construction of new cable plant. The remaining expenditures were used to
maintain the value of the Venture's systems. Funding for these expenditures was
provided by cash on hand, cash generated from operations and borrowings
available under the Venture's credit facility. Anticipated capital expenditures
for the remainder of 1997 are approximately $1,225,000. The purchase of
converters will account for
8
approximately 36 percent of the anticipated expenditures, construction of
service drops to homes will account for approximately 28 percent of the
anticipated expenditures, and construction of new cable plant will account for
approximately 13 percent of the anticipated expenditures. The remainder of the
expenditures is necessary to maintain the value of the Venture's remaining
systems. As a result of the pending sale of the Clearlake System, remaining
budgeted capital expenditures for the Clearlake System for 1997 will be only for
various enhancements necessary to maintain the value of the Clearlake System
until it is sold. Funding for these expenditures is expected to come from cash
on hand, cash generated from operations and available borrowings under the
Venture's credit facility.
At September 30, 1997, the Venture's $27,500,000 credit facility had
$23,300,000 outstanding, leaving $4,200,000 available for future borrowings. On
September 30, 2000, the maximum amount available begins to reduce quarterly
until June 30, 2005 when the amount available will be zero. Interest on
outstanding principal is calculated at the Venture's option of the Base Rate
plus 3/8 percent, or the Euro-Rate plus 1-3/8 percent. The effective interest
rate on amounts outstanding as of September 30, 1997 and 1996 was 7.06 percent.
One of the primary objectives of the Venture is to provide quarterly cash
distributions to the Venture partners, primarily from cash generated through
operating activities of the Venture. The Venture's partners in turn seek to
provide quarterly cash distributions to their partners. The Venture used cash
generated from operations to fund capital expenditures and did not declare
quarterly cash flow distributions during the first nine months of 1997, although
it did make a distribution of $15,000,000 from the proceeds of the sale of the
Colorado Systems during the first quarter of 1997. Such distributions, if any,
will be announced on a quarter-by-quarter basis. The Venture does not
anticipate resuming cash flow distributions in the near future.
The General Partner believes that the Venture has sufficient sources of
capital available from cash on hand, cash generated from operations and from
borrowings available under its credit facility to meet its anticipated needs.
RESULTS OF OPERATIONS
- ---------------------
The Partnership -
- ---------------
On February 28, 1996, the Partnership sold the Orangeburg System, which was
the Partnership's only directly held system. The Partnership's continuing
operations are represented by its 40 percent interest in the Venture.
The Venture -
- -----------
Revenues of the Venture decreased $1,687,225, or approximately 27 percent,
to $4,513,647 for the three months ended September 30, 1997 from $6,200,872 for
the comparable 1996 period. Revenues decreased $4,451,428, or approximately 24
percent, to $13,867,189 for the nine months ended September 30, 1997 from
$18,318,617 for the comparable 1996 period. These decreases were a result of
the sale of the Colorado Systems. Disregarding the effect of the sale of the
Colorado Systems, revenues would have increased $193,900, or approximately 5
percent, and $652,205, or approximately 5 percent, for the three and nine month
periods ended September 30, 1997 and 1996, respectively. Basic service rate
increases accounted for approximately 83 percent and 74 percent of the increases
in revenues for the three and nine month periods ended September 30, 1997. No
other single factor significantly affected these increases in revenues.
Operating expenses consist primarily of costs associated with the operation
and administration of the Venture's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.
Operating expenses decreased $1,076,209, or approximately 32 percent, to
$2,333,184 for the three months ended September 30, 1997 from $3,409,393 for the
comparable 1996 period. Operating expenses decreased $2,366,668, or
approximately 23 percent, to $7,799,531 for the nine months ended September 30,
1997 from $10,166,199 for the comparable 1996 period. These decreases were a
result of the sale of the Colorado Systems. Disregarding the effect of the sale
of the Colorado Systems, operating expenses would have increased $40,497, or
approximately 2 percent, and $198,932, or approximately 3 percent, for the three
and nine month periods ended September 30, 1997 and 1996. These increases in
operating expenses for the three and nine month periods were due primarily to
increases in programming fees. Operating expenses represented 52 percent and 54
percent, respectively, of revenues for the three and nine month periods
9
ended September 30, 1997 compared to 54 percent and 55 percent, respectively,
for the similar periods in 1996. No other individual factor was significant to
these increases in operating expenses.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard. Operating cash flow decreased
$611,016, or approximately 22 percent, to $2,180,463 for the three months ended
September 30, 1997 from $2,791,479 for the comparable 1996 period. For the nine
month periods ended September 30, 1997, operating cash flow decreased
$2,084,760, or approximately 26 percent, to $6,067,658 in 1997 from $8,152,418
in 1996. These decreases were a result of the sale of the Colorado Systems.
Disregarding the effect of the sale of the Colorado Systems, operating cash flow
would have increased $153,403, or approximately 8 percent, and $453,273, or
approximately 8 percent, for the three and nine month periods ended September
30, 1997 and 1996. These increases were due to the increases in revenues
exceeding the increases in operating expenses.
Management fees and allocated overhead from the General Partner decreased
$194,508, or approximately 29 percent, to $476,874 for the three months ended
September 30, 1997 from $671,382 for the comparable 1996 period. Management
fees and allocated overhead from the General Partner decreased $562,443, or
approximately 27 percent, to $1,521,950 for the nine month period ended
September 30, 1997 from $2,084,393 for the comparable 1996 period. These
decreases were as a result of the sale of the Colorado Systems. Disregarding
the effect of the sale of the Colorado Systems, management fees and allocated
overhead would have increased $5,149, or approximately 1 percent, and $13,253,
or approximately 1 percent, for the three and nine month periods ended September
30, 1997 and 1996, respectively. These increases were primarily due to an
increase in revenues upon which such management fees and allocations are based.
Depreciation and amortization expense decreased $521,828, or approximately
28 percent, to $1,323,160 for the three months ended September 30, 1997 from
$1,844,988 for the comparable 1996 period. Depreciation and amortization
expense decreased $1,986,943, or approximately 33 percent, to $4,042,491 for the
nine months ended September 30, 1997 from $6,029,434 for the comparable 1996
period. These decreases were a result of the sale of the Colorado Systems.
Disregarding the effect of the sale of the Colorado Systems, depreciation and
amortization expense would have increased $49,155, or approximately 4 percent,
for the three month periods ended September 30, 1997 and 1996. This increase
was due to an increase in the Venture's depreciable asset base. Depreciation
and amortization expense would have decreased $407,143, or approximately 9
percent, for the nine month periods ended September 30, 1997 and 1996. This
decrease was due to the maturation of the Venture's depreciable asset base.
The Venture's operating income increased $105,320, or approximately 38
percent, to $380,429 for the three months ended September 30, 1997 compared to
$275,109 for the comparable 1996 period. The Venture's operating income
increased $464,626 to $503,217 for the nine months ended September 30, 1997
compared to $38,591 for the comparable 1996 period. Disregarding the effect of
the sale of the Colorado Systems, the Venture's operating income would have
increased $99,099, or approximately 41 percent, from $339,491 for the three
months ended September 30, 1997 compared to $240,392 for the comparable 1996
period. This increase was a result of the increase in operating cash flow
exceeding the increase in depreciation and amortization expense. The Venture
would have reported operating income of $817,353 for the nine months ended
September 30, 1997 compared to an operating loss of $29,809 for the comparable
1996 period. This change was a result of an increase in operating cash flow and
a decrease in depreciation and amortization expense.
Interest expense decreased $434,195, or approximately 56 percent, to
$337,578 for the three months ended September 30, 1997 from $771,773 for the
comparable 1996 period. Interest expense decreased $1,283,316, or approximately
55 percent, to $1,047,954 for the nine months ended September 30, 1997 from
$2,331,270 for the comparable 1996 period. These decreases were primarily due to
the lower outstanding balances on the Venture's interest bearing obligations, as
a result of a portion of the proceeds from the sale of the Colorado Systems
being used to repay a portion of the outstanding loan principal balance.
The Venture reported a gain on the sale of the Colorado Systems of
$18,889,257 in the first nine months of 1997. No similar gain was reported in
the first nine months of 1996.
The Venture reported a net loss of $22,009 for the three months ended
September 30, 1997 compared to $297,564 for the similar 1996 period. This
change was due to the factors discussed above. The Venture reported net income
of
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$10,994,191 for the nine months ended September 30, 1997 compared to a net loss
of $1,368,424 for the similar 1996 period. This change was primarily a result of
the gain on the sale of the Colorado Systems and other factors as discussed
above.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
Report on Form 8-K dated September 17, 1997, reported that on September
17, 1997, the Venture entered into an asset purchase agreement to sell
the cable television systems serving subscribers in the areas in and
around the communities of Clearlake and Lake Port, California for a
sales price of $21,400,000, subject to customary closing adjustments.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES CABLE INCOME FUND 1-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
--------------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 13, 1997
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