SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 31, 1998
JONES CABLE INCOME FUND 1-B, LTD.
---------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-14906 84-1010417
-------- ------- ----------
(State of Organization) (Commission File No.) (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
- --------------------------------------------------- --------------
(Address of principal executive office and Zip Code (Registrant's
telephone no.
including area code)
Item 2. Disposition of Assets
---------------------
On August 31, 1998, Jones Cable Income Fund 1-B/C Venture (the
"Venture") sold the cable television system serving the community of South Sioux
City, Nebraska (the "South Sioux City System") to an unaffiliated cable
television system operator for an aggregate sales price of $9,500,000, subject
to customary closing adjustments. The Venture is owned 40 percent by Jones
Cable Income Fund 1-B, Ltd. (the "Partnership") and 60 percent by Jones Cable
Income Fund 1-C, Ltd. ("Fund 1-C").
From the proceeds of the South Sioux City System's sale, based upon
financial information as of June 30, 1998, the Venture settled working capital
adjustments, paid a brokerage fee to The Jones Group, Ltd., a subsidiary of
Jones Intercable, Inc., the general partner of the Partnership and Fund 1-C (the
"General Partner"), of $237,500, representing 2.5 percent of the sales price,
for acting as a broker in the transaction, repaid $2,000,000 of the then
outstanding balance of the Venture's credit facility and will distribute in
September 1998 the remaining net sale proceeds of $7,210,000 to the Partnership
and Fund 1-C in proportion to their ownership interests in the Venture. The
Partnership will receive the $2,867,417 and Fund 1-C will receive $4,342,583 of
such distribution. The Partnership, in turn, will distribute $2,867,417
(approximately $68 for 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 will not return the
amount initially contributed by the limited partners to the Partnership plus the
limited partners' liquidation preference 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 South Sioux City
System did not represent a sale of all or substantially all of the Partnership's
assets, no vote of the limited partners was required to approve the sale.
The Venture's remaining assets are the cable television system serving
areas in and around Myrtle Creek, Oregon (the "Myrtle Creek System"). The
Venture continues to own the Myrtle Creek System.
Taking into account prior distributions to limited partners from
operating cash flow, and from the net proceeds of prior cable television system
sales from the distribution of the Partnership's portion of the net sale
proceeds from the sale of the South Sioux City System, the limited partners of
the Partnership will have received a total of $1,066 for each $1,000 invested in
the Partnership.
2
Item 7. Financial Statements and Exhibits
---------------------------------
a. Historical financial statements.
Not applicable.
b. Pro forma financial statements.
Pro forma financial statements of the Partnership and the
Venture reflecting the disposition of the South Sioux City
System are attached.
c. Exhibits.
2.1 Asset Purchase Agreement dated as of June 24, 1998
between Jones Cable Income Fund 1-B/C Venture and TelePartners L.L.C.
3
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 hereunto duly authorized.
JONES CABLE INCOME FUND 1-B, LTD.
By: Jones Intercable, Inc.,
its general partner
Dated: September 14, 1998 By:/s/ Elizabeth M. Steele
-----------------------
Elizabeth M. Steele
Vice President, General
Counsel and Secretary
(38059)
4
UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF JONES CABLE INCOME FUND 1-B, LTD.
The following unaudited pro forma balance sheet assumes that as of
June 30, 1998, Jones Cable Income Fund 1-B/C Venture (the "Venture") had sold
the cable television system serving subscribers in the communities of Three
Rivers, Schoolcraft/Vicksburg, Constantine/White Pigeon, Dowagiac, Watervliet
and Vandalia, all in the State of Michigan (the "Southwest Michigan System") for
$31,250,000 and had sold the cable television system serving the community of
South Sioux City, Nebraska (the "South Sioux City System") for $9,500,000. The
Venture sold the Southwest Michigan System on July 31, 1998. Jones Cable Income
Fund 1-B, Ltd. (the "Partnership") and Jones Cable Income Fund 1-C, Ltd. ("Fund
1-C"), are the partners in the Venture. The funds available to the Venture,
adjusting for the estimated net closing adjustments of the South Sioux City
System, are expected to total approximately $9,510,061. Such funds will be used
to repay indebtedness of the Venture, and $7,210,000 will be distributed to the
partners of the Venture. The Partnership will then distribute $2,867,417 to the
limited partners of the Partnership. The unaudited pro forma statements of
operations assume that the Southwest Michigan System and the South Sioux City
System were sold as of January 1, 1997.
The Partnership will continue to own a 40 percent interest in the
Venture.
The unaudited pro forma financial information should be read in
conjunction with the appropriate notes to the unaudited pro forma financial
information.
ALL OF THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL INFORMATION IS
BASED UPON AMOUNTS AS OF JUNE 30, 1998 AND CERTAIN ESTIMATES OF LIABILITIES AT
CLOSING. FINAL RESULTS MAY DIFFER FROM SUCH INFORMATION.
JONES CABLE INCOME FUND 1-B, LTD.
UNAUDITED PRO FORMA BALANCE SHEET
June 30, 1998
Pro Forma Pro Forma
As Reported Adjustments Balance
------------ ------------ ----------
ASSETS
Investment in cable television joint venture $ 2,486,428 $(2,135,070) $ 351,358
Distribution receivable from cable
television joint venture - 11,298,657 11,298,657
------------ ----------- -----------
Total assets $ 2,486,428 $ 9,163,587 $11,650,015
============ =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities $ 52,766 $ (52,766) $ -
------------ ----------- -----------
Partners' capital 2,433,662 9,216,353 11,650,015
------------ ----------- -----------
Total liabilities and partners' capital $ 2,486,428 $ 9,163,587 $11,650,015
============ =========== ===========
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited pro forma balance sheet.
6
JONES CABLE INCOME FUND 1-B, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
Pro Forma Pro Forma
As Reported Adjustments Balance
------------ ------------ ----------
EQUITY IN NET INCOME (LOSS) OF
CABLE TELEVISION JOINT VENTURE $ 6,928,894 $ (7,009,530) $ (80,636)
------------ ------------ ----------
NET INCOME (LOSS) $ 6,928,894 $ (7,009,530) $ (80,636)
============ ============ ==========
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited pro forma statement.
7
JONES CABLE INCOME FUND 1-B, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
Pro Forma Pro Forma
As Reported Adjustments Balance
------------- ----------- ----------
OTHER EXPENSE $ (52,911) $ 52,911 $ -
------------ ----------- ----------
LOSS BEFORE EQUITY IN NET
INCOME (LOSS) OF CABLE
TELEVISION JOINT VENTURE (52,911) 52,911 -
EQUITY IN NET INCOME (LOSS) OF
CABLE TELEVISION JOINT VENTURE 4,734,717 (4,754,398) (19,681)
------------ ----------- ----------
NET INCOME (LOSS) $ 4,681,806 $(4,701,487) $ (19,681)
============ =========== ==========
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited pro forma statement.
8
JONES CABLE INCOME FUND 1-B, LTD.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1) The following calculations present the sale of the South Sioux City
System and the resulting estimated proceeds expected to be received by the
Partnership.
2) The unaudited pro forma balance sheet assumes that the Venture had sold
the Southwest Michigan System for $31,250,000 and had sold the South Sioux City
System for $9,500,000 as of June 30, 1998. The unaudited pro forma statements
of operations assume that the Venture had sold the cable television systems
serving Brighton/Broomfield, Colorado; Clearlake Oaks, California; the Southwest
Michigan System; and the South Sioux City System as of January 1, 1997.
3) The estimated gain recognized from the sale of the South Sioux City
System and corresponding estimated distribution to limited partners as of June
30, 1998 has been computed as follows:
GAIN ON SALE OF ASSETS:
Contract sales price $ 9,500,000
Less: Net book value of investment in cable television properties
at June 30, 1998 (4,535,026)
Payment of Brokerage Fee (237,500)
-------------
Gain on sale of assets $ 4,727,474
=============
DISTRIBUTIONS TO PARTNERS:
Contract sales price $ 9,500,000
Working capital adjustment:
Add: Current assets 187,072
Less: Current liabilities (177,011)
-------------
Adjusted cash received by the Venture 9,510,061
Less: Repayment of outstanding debt to third parties (2,078,170)
Payment of brokerage fee (237,500)
Plus: Cash on hand 15,609
-------------
Cash available for distribution $ 7,210,000
=============
Distribution to the Partnership $ 2,867,417
=============
Distribution to Fund 1-C $ 4,342,583
=============
4) The unaudited pro forma statements of operations reflect the sale of
the South Sioux City System and the repayment of approximately $2,078,170 of
debt with proceeds of such sale. The Partnership will continue to own a 40
percent interest in the Venture.
9
UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF JONES CABLE INCOME FUND 1-B/C VENTURE
The following unaudited pro forma balance sheet assumes that as of June 30,
1998, Jones Cable Income Fund 1-B/C Venture (the "Venture") had sold the cable
television system serving subscribers in the communities of Three Rivers,
Schoolcraft/Vicksburg, Constantine/White Pigeon, Dowagiac, Watervliet and
Vandalia, all in the State of Michigan (the "Southwest Michigan System") for
$31,250,000 and had sold the cable television system serving the community of
South Sioux City, Nebraska (the "South Sioux City System") for $9,500,000. The
Venture sold the Southwest Michigan System on July 31, 1998. Jones Cable Income
Fund 1-C, Ltd. and Jones Cable Income Fund 1-B, Ltd. are the partners in the
Venture. The funds available to the Venture, adjusting for the estimated net
closing adjustments of the South Sioux City System, are expected to total
approximately $9,510,061. Such funds will be used to repay indebtedness of the
Venture, and $7,210,000 will be distributed to the partners of the Venture. The
unaudited pro forma statements of operations assume that the Southwest Michigan
System and South Sioux City System were sold as of January 1, 1997.
The unaudited pro forma financial information should be read in conjunction
with the appropriate notes to the unaudited pro forma financial information.
ALL OF THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL INFORMATION IS BASED
UPON AMOUNTS AS OF JUNE 30, 1998 AND CERTAIN ESTIMATES OF LIABILITIES AT
CLOSING. FINAL RESULTS MAY DIFFER FROM SUCH INFORMATION.
JONES CABLE INCOME FUND 1-B/C VENTURE
UNAUDITED PRO FORMA BALANCE SHEET
June 30, 1998
Pro Forma Pro Forma
As Reported Adjustments Balance
------------- ------------- -------------
ASSETS
Cash and cash equivalents $ 456,818 $ 28,183,439 $ 28,640,257
Trade receivables, net 388,348 (371,122) 17,226
Investment in cable television properties:
Property, plant and equipment, net 13,974,508 (11,481,139) 2,493,369
Intangibles, net 5,789,891 (4,815,958) 973,933
------------- ------------- -------------
Total investment in cable television properties 19,764,399 (16,297,097) 3,467,302
Deposits, prepaid expenses and deferred charges 814,168 (680,647) 133,521
------------- ------------- -------------
Total assets $ 21,423,733 $ 10,834,573 $ 32,258,306
============= ============= =============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Debt $ 14,373,366 $ (11,747,975) $ 2,625,391
Accrued liabilities 739,440 (438,067) 301,373
Subscriber prepayments 163,463 (125,395) 38,068
Accrued distribution to joint venture partners - 28,410,000 28,410,000
------------- ------------- -------------
Total liabilities 15,276,269 16,098,563 31,374,832
------------- ------------- -------------
Partners' capital 6,147,464 (5,263,990) 883,474
------------- ------------- -------------
Total liabilities and partners' capital $ 21,423,733 $ 10,834,573 $ 32,258,306
============= ============= =============
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited pro forma balance sheet.
11
JONES CABLE INCOME FUND 1-B/C VENTURE
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
Pro Forma Pro Forma
As Reported Adjustments Balance
-------------- ------------- ------------
REVENUES $ 6,246,930 $ (5,015,944) $ 1,230,986
COSTS AND EXPENSES:
Operating expenses 3,613,725 (2,889,218) 724,507
Management fees and allocated overhead from
General Partner 697,002 (541,362) 155,640
Depreciation and amortization 2,173,449 (1,772,988) 400,461
-------------- ------------- ------------
OPERATING LOSS (237,246) 187,624 (49,622)
-------------- ------------- ------------
OTHER INCOME (EXPENSES):
Interest expense (402,286) 389,991 (12,295)
Gain on sale of cable television system 12,638,349 (12,638,349) -
Other, net (93,568) 105,997 12,429
-------------- ------------- ------------
Total other income (expense), net 12,142,495 (12,142,361) 134
-------------- ------------- ------------
NET INCOME (LOSS) $ 11,905,249 $ (11,954,737) $ (49,488)
============== ============= ============
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited statement.
12
JONES CABLE INCOME FUND 1-B/C VENTURE
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1998
Pro Forma Pro Forma
As Reported Adjustments Balance
-------------- -------------- -------------
REVENUES $ 6,246,930 $ (5,015,944) $ 1,230,986
COSTS AND EXPENSES:
Operating expenses 3,613,725 (2,889,218) 724,507
Management fees and allocated overhead from
General Partner 697,002 (541,362) 155,640
Depreciation and amortization 2,173,449 (1,772,988) 400,461
-------------- -------------- -------------
OPERATING LOSS (237,246) 187,624 (49,622)
-------------- -------------- -------------
OTHER INCOME (EXPENSES):
Interest expense (402,286) 389,991 (12,295)
Gain on sale of cable television system 12,638,349 (12,638,349) -
Other, net (93,568) 105,997 12,429
-------------- -------------- -------------
Total other income (expense), net 12,142,495 (12,142,361) 134
-------------- -------------- -------------
NET INCOME (LOSS) $ 11,905,249 $ (11,954,737) $ (49,488)
============== ============== =============
The accompanying notes to unaudited pro forma financial statements are an
integral of this unaudited statement.
13
JONES CABLE INCOME FUND 1-B/C VENTURE
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
Pro Forma Pro Forma
As Reported Adjustments Balance
-------------- ------------- ------------
REVENUES $ 18,338,834 $ (15,912,017) $ 2,426,817
COSTS AND EXPENSES:
Operating expenses 10,395,892 (8,967,698) 1,428,194
Management fees and allocated overhead from
General Partner 1,992,335 (1,655,359) 336,976
Depreciation and amortization 5,414,431 (4,633,551) 780,880
-------------- ------------- ------------
OPERATING INCOME (LOSS) 536,176 (655,409) (119,233)
OTHER INCOME (EXPENSES):
Interest expense (1,521,275) 1,499,803 (21,472)
Gain on sale of cable television system 18,493,041 (18,493,041) -
Other, net (85,528) 23,476 (62,052)
-------------- ------------- ------------
Total other income (expense), net 16,886,238 (16,969,762) (83,524)
-------------- ------------- ------------
NET INCOME (LOSS) $ 17,422,414 $ (17,625,171) $ (202,757)
============== ============= ============
The accompanying notes to unaudited pro forma financial statements are
an integral part of this unaudited statement.
14
JONES CABLE INCOME FUND 1-B/C VENTURE
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1) The following calculations present the sale of the South Sioux City
System and the resulting estimated proceeds expected to be received by the
Venture.
2) The unaudited pro forma balance sheet assumes that the Venture had sold
the Southwest Michigan System for $31,250,000 and had sold the South Sioux City
System for $9,500,000 as of June 30, 1998. The unaudited pro forma statements
of operations assume that the Venture had sold the cable television systems
serving Brighton/Broomfield, Colorado; Clearlake Oaks, California; the Southwest
Michigan System; and the South Sioux City System as of January 1, 1997.
3) The estimated gain recognized from the sale of the South Sioux City
System and corresponding estimated distribution to joint venture partners as of
June 30, 1998 has been computed as follows:
GAIN ON SALE OF ASSETS:
Contract sales price $ 9,500,000
Less: Net book value of investment in cable television properties
at June 30, 1998 (4,535,026)
Payment of Brokerage Fee (237,500)
-------------
Gain on sale of assets $ 4,727,474
=============
DISTRIBUTIONS TO PARTNERS:
Contract sales price $ 9,500,000
Working capital adjustment:
Add: Current assets 187,072
Less: Current liabilities (177,011)
-------------
Adjusted cash received by the Venture 9,510,061
Less: Repayment of outstanding debt to third parties (2,078,170)
Payment of brokerage fee (237,500)
Plus: Cash on hand 15,609
-------------
Cash available for distribution $ 7,210,000
=============
Distribution to Fund 1-B $ 2,867,417
=============
Distribution to Fund 1-C $ 4,342,583
=============
4) The unaudited pro forma statements of operations reflect the sale of
the South Sioux City System and the repayment of approximately $2,078,170 of
debt with proceeds of such sale.
15