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FORM 10-K 405
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission file number: 0-15714
JONES CABLE INCOME FUND 1-C, LTD.
(Exact name of registrant as specified in its charter)
Colorado 84-1010419
(State of Organization) (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)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
Interests
Indicate by check mark whether the registrants, (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days:
Yes x No
--- ---
Aggregate market value of the voting stock held by non-affiliates of the
registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
---
DOCUMENTS INCORPORATED BY REFERENCE: None
(15728)
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Jones Cable Income Fund 1-C, Ltd. (the "Partnership")
is a Colorado limited partnership that was formed pursuant to the public
offering of limited partnership interests in the Jones Cable Income Fund 1
Limited Partnership Program (the "Program"), which was sponsored by Jones
Intercable, Inc. (the "General Partner"). Jones Cable Income Fund 1-A, Ltd. and
Jones Cable Income Fund 1-B, Ltd. ("Fund 1-B") are the other partnerships that
were formed pursuant to the Program. The Partnership and Fund 1-B formed a
general partnership known as Jones Cable Income Fund 1-B/C Venture (the
"Venture") in which the Partnership owns a 60 percent interest and Fund 1-B owns
a 40 percent interest. The Partnership and the Venture were formed for the
purpose of acquiring and operating cable television systems.
The Partnership does not directly own any cable television systems. The
Venture owns the cable television systems serving the communities of Brighton
and Broomfield and portions of Boulder County, Colorado (the
"Brighton/Broomfield System"), Clearlake Oaks, California (the "Clearlake Oaks
System"), Canyonville, Myrtle Creek, Riddle and Winston, Oregon (the "Myrtle
Creek System"), South Sioux City, Nebraska (the "South Sioux City System") and
Three Rivers, Schoolcraft/Vicksburg, Constantine/White Pigeon, Dowagiac,
Watervliet and Vandalia, Michigan (the "Southwestern Michigan System"). The
Brighton/Broomfield System, Clearlake Oaks System, Myrtle Creek System, South
Sioux City System and the Southwestern Michigan System may hereinafter
collectively be referred to as the "Systems."
One of the primary objectives of the Partnership is to provide
quarterly cash distributions to the partners. The Partnership declared no
distributions in 1994, and it does not expect to declare any distributions in
1995. The General Partner has agreed to defer its portion of any cash flow
distributions until the Partnership is liquidated. The Partnership's only
source of cash with which it can make distributions is from the Venture's
distributions to the Partnership. Due to the Venture's limited borrowing
capacity under its credit facility, the Venture will need to use cash generated
from its operations to fund capital expenditures, and thus the Venture does not
anticipate resumption of distributions to the Partnership or to Fund 1-B in the
near term.
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The Systems
also offer a package that includes the basic service channels and the tier
services.
The Systems also offer premium services to their subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
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The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service on
a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. In addition,
advertising revenues are becoming a significant source of revenue for the
Systems. As a result of the adoption by the FCC of new rules under the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), and several rate regulation orders, the Systems' rate structures for
cable programming services and equipment have been revised. See Regulation and
Legislation. At December 31, 1994, the Systems' monthly basic service rates
ranged from $6.72 to $15.96, monthly basic and tier ("basic plus") service
rates ranged from $17.83 to $22.39 and monthly premium services ranged from
$3.40 to $12.95 per premium service. Charges for additional outlets have been
eliminated, and charges for remote controls and converters have been
"unbundled" from the programming service rates. In addition pay-per-view
programs and advertising fees generate revenues. Related charges may include a
nonrecurring installation fee that ranges from $4.95 to $45.00; however, from
time to time the Systems have followed the common industry practice of reducing
or waiving the installation fee during promotional periods. Commercial
subscribers such as hotels, motels and hospitals are charged a nonrecurring
connection fee that usually covers the cost of installation. Except under the
terms of certain contracts with commercial subscribers and residential
apartment and condominium complexes, the subscribers are free to discontinue
the service at any time without penalty. For the year ended December 31, 1994,
of the total fees received by the Systems, basic service and tier service fees
accounted for approximately 69% of total revenues, premium service fees
accounted for approximately 18% of total revenues, pay-per-view fees were
approximately 1% of total revenues, advertising fees were approximately 3% of
total revenues and the remaining 9% of total revenues came principally from
equipment rentals, installation fees and program guide sales. The Venture is
dependent upon the timely receipt of service fees to provide for maintenance
and replacement of plant and equipment, current operating expenses and other
costs of the Systems.
The Venture's business consists of providing cable television services
to a large number of customers, the loss of any one of which would have no
material effect on the Venture's business. Each of the Systems has had some
subscribers who later terminated the service. Terminations occur primarily
because people move to another home or to another city. In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service. The amount of past due accounts in the Systems is
not significant. The General Partner's policy with regard to past due accounts
is basically one of disconnecting service before a past due account becomes
material.
The Venture does not depend to any material extent on the availability
of raw materials; it carries no significant amounts of inventory and it has no
material backlog of customer orders. Neither the Partnership nor the Venture has
any employees because all properties are managed by employees of the General
Partner. The General Partner has engaged in research and development activities
relating to the provision of new services but the amount of the Venture's funds
expended for such research and development has never been material.
Compliance with Federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Venture.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. The Systems' franchises require that franchise fees ranging from
$25.00 per year to 7% of gross revenues of the cable system be paid to the
governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools be
provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2 for a range of
franchise expiration dates of the Systems.)
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The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the 1992 Cable Act also made several
procedural changes to the process under which a cable operator seeks to enforce
its renewal rights which could make it easier in some cases for a franchising
authority to deny renewal. Generally, the franchising authority can finally
decide not to renew a franchise only if it finds that the cable operator has not
substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have the
financial, legal and technical ability to provide the services being proposed
for the future, or has not presented a reasonable proposal for future service. A
final decision of non-renewal by the franchising authority is appealable in
court. The General Partner and its affiliates recently have experienced lengthy
negotiations with some franchising authorities for the granting of franchise
renewals and transfers. Some of the issues involved in recent renewal
negotiations include rate reregulation, customer service standards, cable plant
upgrade or replacement and shorter terms of franchise agreements. The inability
of the partnership to renew a franchise, or lengthy negotiations or litigation
involving the renewal process could have an adverse impact on the business of
the Venture.
COMPETITION. Cable television systems currently experience competition
from several sources, but two technologies, Multichannel Multipoint Distribution
Service ("MMDS") systems, commonly called wireless cable systems, and Direct
Broadcast Satellite ("DBS") systems, which distribute programming to home
satellite dishes, currently pose the greatest potential threat to the cable
television industry.
MMDS systems will likely focus on providing service to residents of
rural areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some areas
of the country, MMDS systems are now in direct competition with cable television
systems. To date, the Partnership has not lost a significant number of
subscribers, nor a significant amount of revenue, to MMDS operators competing
with its cable television systems.
DBS operators deliver premium channel services and specialized
programming to subscribers by high-powered DBS satellites on a wide-scale basis,
and two major companies began operations in 1994. Subscribers are able to
receive DBS services virtually anywhere in the United States with a rooftop or
wall-mounted antenna. In some instances, DBS systems may serve as a complement
to cable television operations by enabling cable television operators to offer
additional channels of programming without the construction of additional cable
plant. DBS companies use video compression technology to increase the channel
capacity of their satellite systems to provide a wide variety of program
services that are competitive with those of cable television systems.
Cable television systems also compete with broadcast television,
private cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only Earth
Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings such as
condominiums, apartment complexes and private residential communities, and TVROs
are satellite receiving antenna dishes that are used by "backyard users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service, the
LMDS, sometimes referred to as cellular television, could have the capability of
delivering approximately 50 channels, or if two systems were combined 100
channels, of video programming to a subscriber's home, which capacity could be
increased by using video compression technology. The General Partner believes
that there are not any current fully operational LMDS systems.
Although the Systems have not yet encountered competition from a
telephone company entering into the business of providing video services to
subscribers, the Systems could potentially face competition from telephone
companies doing so. A Federal cross-ownership restriction has historically
limited entry into the cable television
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business by potentially strong competitors such as telephone companies. This
restriction, which is contained in the 1984 Cable Act, has generally prohibited
telephone companies from owning or operating cable television systems within
their own telephone service areas, but several recent court decisions have
eliminated this restriction. In addition, the FCC is authorizing telephone
companies to provide video dialtone service within their service areas.
Legislation is also pending in Congress that would permit telephone companies to
provide video programming through separate subsidiaries. The General Partner
cannot predict at this time to what extent current restrictions will be modified
to permit telephone companies to provide cable television services within their
own service areas in competition with cable television systems. See Regulation
and Legislation, Ownership and Market Structure for a description of the
potential participation of the telephone industry in the delivery of cable
television services. Entry into the market by telephone companies as direct
competitors of the Systems could adversely impact the profitability of the
Systems. If a telephone company were to become a direct competitor of the
Venture in an area served by a Venture System, the Venture could be at a
competitive disadvantage because of the relative financial strength of a
telephone company compared to the Venture. Depending on a number of factors,
such competition could also result in cable television systems providing the
same types of services now provided by the telephone industry.
The FCC has established a new wireless telecommunications service known
as Personal Communications Service ("PCS"). It is envisioned that PCS would
provide portable non-vehicular mobile communications services similar to that
available from cellular telephone companies, but at a lower cost. PCS would be
delivered by placing numerous microcells in a particular area to be covered,
accessible to both residential and business customers. Because of the need to
link the many microcells necessary to deliver this service economically, many
parties are investigating integration of PCS with cable television operations.
Several cable television multiple systems operators and others, including
affiliates of the General Partner hold or have requested experimental licenses
from the FCC to test PCS technology. The FCC has established spectrum auctioning
procedures for PCS licenses and the licenses are being auctioned in a series of
auction events.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an "overbuild"),
with potential loss of revenues to the operator of the original cable television
system. The Systems currently face no direct competition from other cable
television operators.
COMPETITION FOR SUBSCRIBERS IN THE SYSTEMS. Following is a summary of
competition from DBS, MMDS, SMATV and TVRO operators in the Systems' franchise
areas:
Brighton/Broomfield System There is one MMDS operator in the
service area but it does not provide
significant competition. DBS operators
continue to strongly market their
services in the Denver area; however, to
date the system has not experienced any
significant loss of customers.
Clearlake Oaks System There are seven TVRO dealers that
primarily serve rural or remote areas
which are not served by the Clearlake
Oaks System. There is an unaffiliated
entity marketing five broadcast channels
and four satellite-type channels to
subscribers in the service area.
However, due to the expensive initial
cost for the converters and the lack of
customer service, this entity has
presented little competition.
Myrtle Creek System There are a few TVRO dealers
that provide minimal competition. The
competition from DBS services is minimal
at this time.
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South Sioux City System There is one MMDS dealer near the South
Sioux City System's service area; however,
this dealer has focused primarily on rural
and outlying areas that are not located in
the South Sioux City System's service area.
There are six TVRO dealers that market
primarily to rural or remote areas that are
not served by the South Sioux City System.
Southwestern Michigan There are two TVRO operators
System that provide minimal competition.
There is a DBS operator that currently
provides minimal competition.
REGULATION AND LEGISLATION. The cable television industry is regulated
through a combination of the Federal Communications Commission ("FCC"), some
state governments, and most local governments. In addition, the Copyright Act of
1976 imposes copyright liability on all cable television systems. Cable
television operations are subject to local regulation insofar as systems operate
under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The 1992
Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States, including
those owned and managed by the General Partner, are subject to rate regulation
of basic cable services. In addition, the 1992 Cable Act allows the FCC to
regulate rates for non-basic service tiers other than premium services in
response to complaints filed by franchising authorities and/or cable
subscribers. In April 1993, the FCC adopted regulations governing rates for
basic and non-basic services. The FCC's rules became effective on September 1,
1993.
In compliance with these rules, the General Partner reduced rates
charged for certain regulated services effective September 1, 1993. These
reductions resulted in some decrease in revenues and operating income before
depreciation and amortization; however, the decrease was not as severe as
originally anticipated. The General Partner has undertaken actions to mitigate a
portion of these reductions primarily through (a) new service offerings in some
systems, (b) product re-marketing and repackaging and (c) marketing efforts
directed at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlierannounced regulatory scheme
with respect to rates. The FCC's new regulations generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September 30,
1992 rates, adjusted for inflation, channel modifications, equipment costs, and
increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established an
interim industry-wide 11.25% permitted rate of return, and requested comments on
whether this standard and other interim cost-of-service standards should be made
permanent. The FCC also established a presumption that acquisition costs above a
system's book value should be excluded from the rate base, but the FCC will
consider individual showings to rebut this presumption. The need for special
rate relief will also be considered by the FCC if an operator demonstrates that
the rates set by a cost-of-service proceeding would constitute confiscation of
investment, and that, absent a higher rate, the return necessary to operate and
to attract investment could not be maintained. The FCC will establish a uniform
system of accounts for operators that elect cost-of-service rate
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regulation, and the FCC has adopted affiliate transaction regulations. After a
rate has been set pursuant to a cost-of-service showing, rate increases for
regulated services will be indexed for inflation, and operators will also be
permitted to increase rates in response to increases in costs beyond their
control, such as taxes and increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
Venture elected to file cost-of-service showings for its Brighton/Broomfield
System, Myrtle Creek System, South Sioux City System and Southwestern Michigan
System. The General Partner thus anticipates no further reduction in revenues
or operating income before depreciation and amortization in these systems
resulting from the FCC's rate regulations. At this time, however, the
regulatory authorities have not approved the cost-of-service showings, and
there can be no assurance that the Venture's cost-of-service showings will
prevent further rate reductions in these systems until such final approval is
received. The Venture complied with the new benchmark regulations and further
reduced rates in its Clearlake Oaks System in July 1994. The Venture will
continue its efforts to mitigate the effect of such rate reductions.
Among other issues addressed by the FCC in its February rate orders was
the treatment of packages of a la carte channels. The FCC in its rate
regulations adopted April 1, 1993, exempted from rate regulation the price of
packages of a la carte channels upon the fulfillment of certain conditions. On
November 10, 1994, the FCC reversed its policy regarding rate regulation of
packages of a la carte services. A la carte services that are offered in a
package will now be subject to rate regulation by the FCC, although the FCC
indicated that it cannot envision circumstances in which any price for a
collective offering of premium channels that have traditionally been offered on
a per-channel basis would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge subscribers
for new cable programming services. In addition to the present formula for
calculating the permissible rate for new services, the FCC instituted a
three-year flat fee mark-up plan for charges relating to new channels of cable
programming services. Commencing on January 1, 1995, operators may charge for
new channels of cable programming services added after May 14, 1994 at a rate of
up to 20 cents per channel, but may not make adjustments to monthly rates
totaling more than $1.20 plus an additional 30 cents for programming license
fees per subscriber over the first two years of the three-year period for these
new services. Operators may charge an additional 20 cents in the third year only
for channels added in that year plus the costs for the programming. Operators
electing to use the 20 cent per channel adjustment may not also take a 7.5%
mark-up on programming cost increases, which is permitted under the FCC's
current rate regulations. The FCC has requested further comment as to whether
cable operators should continue to receive the 7.5% mark-up on increases in
license fees on existing programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they elect
so long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators do
not remove programming services from existing tiers and offer them on the NPT.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on June
27, 1994 and remanded the case to the district court for further development of
a factual record. The Supreme Court's majority determined that the must-carry
rules were content neutral, but that it was not yet proven that the rules were
needed to preserve the economic health of the broadcasting industry. In the
interim, the must-carry rules will remain in place during the pendency of the
proceedings in district court. In 1993, a Federal district court for the
District of Columbia upheld provisions of the 1992 Cable Act concerning rate
regulation, retransmission consent, restrictions on vertically integrated cable
television operators and programmers, mandatory carriage of programming on
commercial leased channels and public, educational and governmental access
channels and the exemption for municipalities from civil damage liability
arising out of local
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regulation of cable services. The 1992 Cable Act's provisions providing for
multiple ownership limits for cable operators and advance notice of free
previews for certain programming services have been found unconstitutional. In
November 1993, the United States Court of Appeals for the District of Columbia
held that the FCC's regulations implemented pursuant to Section 10 of the 1992
Cable Act, which permit cable operators to ban indecent programming on public,
educational or governmental access channels or leased access channels, were
unconstitutional, but the court has agreed to reconsider its decision. All of
these decisions construing provisions of the 1992 Cable Act and the FCC's
implementing regulations have been or are expected to be appealed.
Ownership and Market Structure. The FCC rules and Federal law generally
prohibit the direct or indirect common ownership, operation, control or interest
in a cable television system, on the one hand, and a local television broadcast
station whose television signal reaches any portion of the community served by
the cable television system, on the other hand. The FCC recently lifted its ban
on the cross-ownership of cable television systems by broadcast networks. The
FCC revised its regulations to permit broadcast networks to acquire cable
television systems serving up to 10% of the homes passed in the nation, and up
to 50% of the homes passed in a local market. Neither the Partnership nor the
General Partner has any direct or indirect ownership, operation, control or
interest in a television broadcast station, or a telephone company, and they are
thus presently unaffected by the cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. Several Federal district courts have struck down the 1984
Cable Act's telco/cross-ownership provision as facially invalid and inconsistent
with the First Amendment. The United States Courts of Appeals for the Fourth and
the Ninth Circuits have upheld the appeals of two of these district court
decisions, and the United States Justice Department is expected to request the
United States Supreme Court to review these two decisions. This Federal
cross-ownership rule is particularly important to the cable industry since these
telephone companies already own certain facilities needed for cable television
operation, such as poles, ducts and associated rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies
to offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint marketing
arrangements. In its video dialtone order, which was part of a comprehensive
proceeding examining whether and under what circumstances telephone companies
should be allowed to provide cable television services, including video
programming to their customers, the FCC concluded that neither the 1984 Cable
Act nor its rules apply to prohibit the interexchange carriers (i.e., long
distance telephone companies such as AT&T) from providing such services to their
customers. Additionally, the FCC also concluded that where a local exchange
carrier ("LEC") makes its facilities available on a common carrier basis for the
provision of video programming to the public, the 1984 Cable Act does not
require the LEC or its programmer customers to obtain a franchise to provide
such service. This aspect of the FCC's video dialtone order was upheld on appeal
by the United States Court of Appeals for the D.C. Circuit. The FCC recently
issued an order reaffirming its initial decision, and this order has been
appealed. Because cable operators are required to bear the costs of complying
with local franchise requirements, including the payment of franchise fees, the
FCC's decision could place cable operators at a competitive disadvantage
vis-a-vis services offered on a common carrier basis over local telephone
company provided facilities. In its Reconsideration Order, the FCC, among other
actions, refused to require telephone companies to justify cost allocations
prior to the construction of video dialtone facilities, and indicated that it
would provide guidance on costs that must be included in proposed video dialtone
tariffs. The FCC also established dual Federal/state
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jurisdiction over video dialtone services based on the origination point of the
video dialtone programming service. In a separate proceeding, the FCC has
proposed to increase the numerical limit on the population of areas qualifying
as "rural" and in which LECs can provide cable service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of
Proposed Rulemaking in its video dialtone docket. The FCC tentatively concluded
that it should not ban telephone companies from providing their own video
programming over their video dialtone platforms in those areas in which the
cable/telephone cross-ownership rules have been found unconstitutional. The FCC
requested comments on this issue and on further refinements of its video
dialtone regulatory framework concerning, among other issues, telephone
programmer affiliation standards, the establishment of structural safeguards to
prevent cross-subsidization of video dialtone and programming activities, and
the continuation of the FCC's ban prohibiting telephone companies from acquiring
cable systems within their telephone service areas for the provision of video
dialtone services. The FCC will also consider whether a LEC offering video
dialtone service must secure a local franchise if that LEC also engages in the
provision of video programming carried on its video dialtone platform. The FCC
has also proposed to broadly interpret its authority to waive the
cable/telephone cross-ownership ban upon a showing by telephone companies that
they comply with the safeguards which the FCC establishes as a condition of
providing video programming.
A number of bills that would have permitted telephone companies to
provide cable television service within their own service areas were considered
during the last Congress, but none were adopted. These bills would have
permitted the provision of cable television service by telephone companies in
their own service areas conditioned on the establishment of safeguards to
prevent cross-subsidization between telephone and cable television operations
and the provision of telecommunication services by cable television systems.
Similar legislation is expected to be considered by Congress during its current
session. The outcome of these FCC, legislative or court proceedings and
proposals or the effect of such outcome on cable system operations cannot be
predicted.
ITEM 2. PROPERTIES
The cable television systems owned by the Venture at December 31, 1994
are described below:
SYSTEM ACQUISITION DATE
------ ----------------
Brighton/Broomfield System
Brighton System December 1987
Broomfield System January 1988
Myrtle Creek System December 1987
Clearlake Oaks System December 1987
South Sioux City System February 1988
Southwestern Michigan System September 1988
The following sets forth (i) the monthly basic plus service rates
charged to subscribers, (ii) the number of basic subscribers and pay units and
(iii) the range of franchise expiration dates for the Systems. The monthly basic
service rates set forth herein represent, with respect to systems with multiple
headends, the basic service rate charged to the majority of the subscribers
within the system. While the charge for basic plus service may have increased in
1993 in some cases as a result of the FCC's rate regulations, overall revenues
may have decreased due to the elimination of charges for additional outlets and
certain equipment. In cable television systems, basic subscribers can subscribe
to more than one pay TV service. Thus, the total number of pay services
subscribed to by basic subscribers are called pay units. As of December 31,
1994, the Systems operated approximately 2,200 miles of cable plant, passing
approximately 132,000 homes, representing an approximate 65% penetration rate.
Figures for numbers of subscribers, miles of cable plant and homes passed are
compiled from the General Partner's records and may be subject to adjustments.
9
10
CLEARLAKE OAKS, CALIFORNIA
At December 31,
-----------------------------------------------
1994 1993 1992
---- ---- ----
Monthly basic plus service rate $20.05 $20.73 $21.00
Basic subscribers 17,267 15,566 14,550
Pay units 5,859 5,376 5,844
Franchise expiration dates range from October 1997 to February 2008.
At December 31,
-------------------------------------------------
BROOMFIELD/BOULDER/BRIGHTON, CO 1994 1993 1992
---- ---- ----
Monthly basic plus service rate $22.39 $22.39 $19.00
Basic subscribers 17,345 16,357 15,504
Pay units 18,106 17,973 17,146
The franchise expiration dates range from April 1996 to June 2013. There is
no franchise expiration date for Brighton.
SOUTHWESTERN MICHIGAN At December 31,
--------------------------------------------------
1994 1993 1992
---- ---- ----
Monthly basic plus service rate $21.69 $21.69 $21.00
Basic subscribers 15,832 15,087 14,377
Pay units 10,328 9,053 9,605
Franchise expiration dates range from April 1996 to August 2014.
SOUTH SIOUX CITY, NEBRASKA At December 31,
-----------------------------------------------------
1994 1993 1992
---- ---- ----
Monthly basic plus service rate $21.56 $20.87 $20.65
Basic subscribers 5,730 5,392 4,868
Pay units 3,699 3,555 3,571
Franchise expiration dates range from June 1998 to July 2004.
At December 31,
------------------------------------------------------
MYRTLE CREEK, OREGON 1994 1993 1992
---- ---- ----
Monthly basic plus service rate $18.93 $19.55 $19.55
Basic subscribers 6,293 6,034 5,854
Pay units 4,014 3,314 3,042
Franchise expiration dates range from February 2001 to February 2009.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates
of the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics, Arts &
Entertainment, Black Entertainment Network, C-SPAN, The Discovery Channel,
Lifetime, Entertainment Sports Network, Home Shopping Network, Mind Extension
University, Music Television, Nickelodeon, Turner Network Television, The
Nashville Network, Video Hits One, and superstations WOR, WGN and TBS. The
Partnership's Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Cinemax, Encore, Home Box Office, Showtime
and The Movie Channel).
10
11
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of February 15, 1995, the approximate number of equity
security holders in the Partnership was 5,064.
11
12
Item 6. Selected Financial Data
For the Year Ended December 31,
----------------------------------------------------------------------------------
Jones Cable Income Fund 1-C* 1994 1993 1992 1991 1990
---------------------------- ----------- ------------ ----------- ------------ ------------
Revenues $21,121,787 $ 20,350,776 $18,848,345 $17,065,348 $15,398,182
Depreciation and Amortization 8,632,481 8,787,240 9,131,442 8,666,224 8,073,425
Operating Loss (2,243,001) (2,397,832) (2,216,442) (2,513,496) (2,353,738)
Consolidated Loss (4,902,676) (4,409,310) (4,123,392) (4,846,706) (4,898,139)
Minority Interest in Consolidated Loss 1,949,794 1,753,583 1,639,873 1,927,535 1,947,990
Net Loss (2,952,882) (2,655,727) (2,483,519) (2,919,171) (2,950,149)
Net Loss per Limited Partnership Unit (34.37) (30.91) (28.91) (33.98) (34.34)
Distributions per Limited Partnership Unit - 30.59 28.96 24.43 18.66
Weighted Average Number of
Limited Partnership Units Outstanding 85,059 85,059 85,059 85,059 85,059
General Partner's Deficit (293,613) (264,084) (211,243) (161,523) (111,339)
Limited Partners' Capital 6,378,188 9,301,541 14,532,711 19,454,895 24,422,999
Total Assets 54,545,774 58,148,834 62,614,638 67,366,941 71,885,757
Debt 42,383,339 36,298,318 35,635,061 32,335,496 28,684,216
General Partner Advances 66,224 4,068,472 602,765 585,943 573,873
For the Year Ended December 31,
----------------------------------------------------------------------------------
Jones Cable Income Fund 1-B/C 1994 1993 1992 1991 1990
----------------------------- ----------- ------------ ------------ ------------ -------------
Revenues $21,121,787 $ 20,350,776 $18,848,345 $17,065,348 $15,398,182
Depreciation and Amortization 8,632,481 8,787,240 9,131,442 8,666,224 8,073,425
Operating Loss (2,243,001) (2,397,832) (2,216,442) (2,513,496) (2,353,738)
Net Loss (4,902,676) (4,409,310) (4,123,392) (4,846,706) (4,898,139)
Partner's Capital 10,286,146 15,188,822 23,918,132 32,131,524 40,428,230
Total Assets 54,545,774 58,148,834 62,614,638 67,366,941 71,885,757
Debt 42,383,339 36,298,318 35,635,061 32,335,496 28,684,216
Advances from Jones Intercable, Inc. 66,224 4,068,472 602,765 585,943 573,873
* This financial information includes the consolidated operations of Jones
Cable Income Fund 1-B/C Venture, in which Jones Cable Income Fund 1-C has an
interest of approximately 60 percent.
12
13
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
JONES CABLE INCOME FUND 1-C
Results of Operations
All of Jones Cable Income Fund 1-C's (the "Partnership") operations
are represented by its approximate 60 percent interest in Jones Cable Income
Fund 1-B/C Venture (the "Venture"). Refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations for the Venture for
details pertaining to the Venture's operations.
Financial Condition
The Partnership owns an approximate 60 percent interest in the Venture.
The accompanying financials statements include 100 percent of the accounts of
the Partnership and those of the Venture's systems reduced by the 40 percent
minority interest in the Venture.
The Partnership provides distributions to its limited partners from
distributions it receives from the Venture. The Partnership declared no
distributions in 1994 and does not expect to declare any in 1995. During 1993
and 1992, the Partnership declared and paid distributions totalling $2,628,284
and $2,488,385, respectively. The General Partner has agreed to defer its
portion of any distributions until the Partnership is liquidated.
The Venture's financial condition is significant to the Partnership and
should be reviewed in conjunction with this discussion. Refer to Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
Venture for details pertaining to the Venture's financial condition.
JONES CABLE INCOME FUND 1-B/C VENTURE
Results of Operations
1994 Compared to 1993-
Revenues of the Venture increased $771,011, or approximately 4 percent,
from $20,350,776 in 1993 to $21,121,787 in 1994. An increase in subscribers
accounted for approximately 41 percent of the increase in revenues. Increases
in premium service revenue and advertising sales revenue accounted for
approximately 28 percent and 26 percent, respectively, of the increase in
revenues. The increase in revenues would have been greater but for the
reduction in certain rates charged due to basic rate regulations issued by the
FCC in April 1993 with which the Venture complied effective September 1, 1993.
Operating, general and administrative expenses increased $645,813, or
approximately 6 percent, from $11,371,695 in 1993 to $12,017,508 in 1994.
Operating, general and administrative expenses represented 56 percent of revenue
in 1993 compared to 57 percent in 1994. The increase in operating, general and
administrative expense was due to increases in programming fees, personnel
related costs, and advertising sales costs. No other individual factor was
significant to the increase in operating, general and administrative expenses.
Management fees and allocated overhead from Jones Intercable, Inc. increased
$125,126, or approximately 5 percent, from $2,589,673 in 1993 to $2,714,799 in
1994, due primarily to the increase in revenues, upon which such fees and
allocations are calculated, and an increase in expenses allocated from Jones
Intercable, Inc. The General Partner has experienced increases in expenses,
including personnel costs and reregulation costs, a portion of which are
allocated to the Venture.
Depreciation and amortization expense decreased $154,759, or
approximately 2 percent, from $8,787,240 in 1993 to $8,632,481 in 1994. This
decrease is due to the maturation of the Venture's depreciable asset base.
Operating loss decreased $154,831, or approximately 7 percent, from
$2,397,832 in 1993 to $2,243,001 in 1994. This decrease is a result of the
increase in revenues and the decrease in depreciation and amortization exceeding
the increase in operating, general and administrative expenses and management
fees and allocated overhead from Jones Intercable, Inc. Operating income before
depreciation and amortization increased less than 1 percent, from $6,389,408 in
1993 to $6,389,480 in 1994.
Interest expense increased $745,019, or approximately 37 percent, from
$2,016,390 in 1993 to $2,761,409 in 1994. This increase was due to higher
effective interest rates on interest bearing obligations. Net loss increased
$434,366, or approximately 11 percent, from $4,409,310 in 1993 to $4,902,676 in
1994. These losses are due to the factors discussed above and are expected to
continue in the future.
1993 Compared to 1992-
Revenues of the Venture increased $1,502,431, or approximately 8
percent, from $18,848,345 in 1992 to $20,350,776 in 1993. An increase in
subscribers accounted for approximately 36 percent of the increase in revenues
and basic rate adjustments accounted for approximately 42 percent of the
increase in revenues. Increases in advertising sales revenue accounted for
approximately 11 percent of the increase in revenues. The increase in revenue
would have been greater but for the reduction in certain rates charged due to
new basic rate regulations issued by the FCC in April 1993 with which the
Venture complied effective September 1, 1993.
Operating, general and administrative expenses increased $1,809,113, or
approximately 19 percent, from $9,562,582 in 1992 to $11,371,695 in 1993.
Operating, general and administrative expenses represented 56 percent of revenue
in 1993 compared to 51 percent in 1992. The increase in operating, general and
administrative expense was due to increases in programming fees, personnel
related costs and plant related costs. No other individual factor was
significant to the increase in operating, general and administrative expenses.
Management fees and allocated overhead from Jones Intercable,
13
14
Inc. increased $218,910, or approximately 9 percent, from $2,370,763 in 1992 to
$2,589,673 in 1993, due primarily to the increase in revenues, upon which such
fees and allocations are calculated, and an increase in expenses allocated from
Jones Intercable, Inc.
Depreciation and amortization expense decreased $344,202, or
approximately 4 percent, from $9,131,442 in 1992 to $8,787,240 in 1993. This
decrease was due to the maturation of the Venture's depreciable asset base.
Operating loss increased $181,390, or approximately 8 percent, from
$2,216,442 in 1992 to $2,397,832 in 1993. This increase was a result of the
increase in operating, general and administrative expenses and management fees
and allocated overhead from Jones Intercable, Inc. exceeding the growth in
revenues and the decrease in depreciation and amortization expense.
Interest expense increased $100,445, or approximately 5 percent, from
$1,915,945 in 1992 to $2,016,390 in 1993. This increase was due to higher
outstanding balances on interest bearing obligations. Net loss increased
$285,918, or approximately 7 percent, from $4,123,392 in 1992 to $4,409,310 in
1993.
Financial Condition
During 1994, capital improvements within the Venture's operating
systems totaled approximately $4,602,000. Approximately 25 percent were for the
construction of service drops to subscribers' homes. Approximately 23 percent of
these expenditures were for rebuilds and upgrades in the Venture's cable
television systems and approximately 15 percent were for the construction of new
cable plant. The remainder of these expenditures related to various system
enhancements and improvements in all of the Venture's systems. Funding for these
expenditures was provided by borrowings under the Venture's credit facility and
cash generated from operations. Anticipated capital expenditures for 1995 are
approximately $5,000,000. Construction of service drops to homes and the
construction of new cable plant will account for approximately 24 percent and 23
percent, respectively, of the anticipated expenditures. Expenditures for pay
security equipment will account for approximately 12 percent, with the remainder
of the expenditures relating to other various enhancements in all of the
Venture's systems. Funding for these expenditures is expected to come from cash
generated from operations and borrowings under the Venture's credit facility.
In May 1994, the Venture completed renegotiation of its credit facility
to increase the maximum amount available to $45,000,000 and to extend the
revolving credit period to June 30, 1997, at which time the outstanding balance
is payable in full. At December 31, 1994, $42,100,000 was outstanding on the
Venture's credit facility leaving $2,900,000 of available borrowings. Interest
on outstanding principal is calculated at the Venture's option of the Prime rate
plus 1/2 percent or LIBOR plus 1-1/2 percent.
14
15
On January 12, 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $15,000,000. The agreement
protects the Venture for LIBOR interest rates that exceed 7 percent for three
years from the date of the agreement. The Venture paid a fee of $145,500.
One of the primary objectives of the Venture is to provide quarterly
cash distributions to the Venture partners. Such cash returns are primarily from
cash generated through operating activities of the Venture. The Venture's credit
facility has a maximum amount available of $45,000,000, of which $42,100,000 was
outstanding on December 31, 1994, which limits the amount of borrowings
available to the Venture to fund capital expenditures; therefore, the Venture
did not declare any distributions in 1994. During 1993 and 1992, the Venture
declared and paid distributions to the Venture partners totaling $4,320,000 and
$4,090,000, respectively. Due to the borrowing limitations discussed above, the
Venture will need to use cash generated from operations to fund capital
expenditures and thus the Venture does not anticipate the resumption of
distributions to the Venture partners in the near term.
The General Partner believes that the Venture has sufficient sources of
capital to meet its presently anticipated needs.
Regulatory and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a greater
degree of regulation of the cable television industry. In April 1993, the FCC
adopted regulations governing rates for basic and non-basic services. These
regulations became effective on September 1, 1993. Such regulations caused
reductions in rates for certain regulated services. On February 22, 1994, the
FCC adopted several additional rate orders including an order which revised its
earlier-announced regulatory scheme with respect to rates. The Venture has filed
cost-of-service showings for its Brighton, Broomfield and Boulder County,
Colorado; Myrtle Creek, Oregon; South Sioux City, Nebraska; and Three Rivers and
Watervliet, Michigan systems and thus anticipates no further reductions in rates
in these systems. The cost-of-service showings have not yet received final
approval from franchising authorities, however, and there can be no assurance
that the Venture's cost-of-service showings will prevent further rate reductions
until such final approvals are received. The Venture complied with the February
1994 benchmark regulations and further reduced rates in its Clearlake Oaks
system effective July 1994. See Item 1 for further discussion of the provisions
of the 1992 Cable Act and the FCC regulations promulgated thereunder.
15
16
Item 8. Financial Statements
JONES CABLE INCOME FUND 1-C
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 and 1993
INDEX
Page
----
Report of Independent Public Accountants 17
Consolidated Balance Sheets 18
Consolidated Statements of Operations 20
Consolidated Statements of Partners' Capital (Deficit) 21
Consolidated Statements of Cash Flows 22
Notes to Consolidated Financial Statements 23
16
17
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Jones Cable Income Fund 1-C:
We have audited the accompanying consolidated balance sheets of JONES CABLE
INCOME FUND 1-C (a Colorado limited partnership) as of December 31, 1994 and
1993, and the related consolidated statements of operations, partners' capital
(deficit) and cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
General Partner's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jones Cable Income Fund 1-C as
of December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
17
18
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
December 31,
------------------------------
ASSETS 1994 1993
------ ------------- -------------
CASH $ 309,848 $ 118,807
TRADE RECEIVABLES, less allowance for doubtful
receivables of $37,534 and $42,088 at December 31, 1994
and 1993, respectively 459,412 432,048
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 57,707,174 53,105,367
Less- accumulated depreciation (24,802,632) (20,804,731)
------------- -------------
32,904,542 32,300,636
Franchise costs, net of accumulated amortization of $23,207,609
and $19,814,129 at December 31, 1994 and 1993, respectively 13,386,181 16,779,661
Subscriber lists, net of accumulated amortization of $6,464,742
and $5,506,482, at December 31, 1994 and 1993, respectively 909,418 1,867,678
Costs in excess of interests in net assets purchased, net of
accumulated amortization of $1,219,184 and $1,039,340 at
December 31, 1994 and 1993, respectively 5,972,836 6,152,680
Noncompete agreement, net of accumulated amortization of $230,224
and $201,388 at December 31, 1994 and 1993, respectively 108,076 136,912
------------- -------------
Total investment in cable television properties 53,281,053 57,237,567
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 495,461 360,412
------------- -------------
Total assets $ 54,545,774 $ 58,148,834
============= =============
The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets.
18
19
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1994 1993
------------------------------------------- ------------ ------------
LIABILITIES:
Debt $ 42,383,339 $ 36,298,318
Accounts payable-
Trade 16,153 36,832
General Partner 66,224 4,068,472
Accrued liabilities 1,638,181 1,325,909
Accrued distribution to limited partners - 650,500
Accrued distribution to Venture partner - 429,500
Subscriber prepayments 270,839 265,589
------------ ------------
Total liabilities 44,374,736 43,075,120
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 8)
MINORITY INTEREST IN JOINT VENTURE 4,086,463 6,036,257
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner-
Contributed capital 1,000 1,000
Accumulated deficit (181,170) (151,641)
Distributions (113,443) (113,443)
------------ ------------
(293,613) (264,084)
------------ ------------
Limited Partners-
Net contributed capital (85,059 units outstanding at
December 31, 1994 and 1993) 34,909,262 34,909,262
Accumulated deficit (16,163,428) (13,240,075)
Distributions (12,367,646) (12,367,646)
------------ ------------
6,378,188 9,301,541
------------ ------------
Total liabilities and partners' capital (deficit) $ 54,545,774 $ 58,148,834
============ ============
The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets.
19
20
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
---------------------------------------------
1994 1993 1992
----------- ----------- -----------
REVENUES $21,121,787 $20,350,776 $18,848,345
COSTS AND EXPENSES:
Operating, general and administrative 12,017,508 11,371,695 9,562,582
Management fees and allocated overhead from
General Partner 2,714,799 2,589,673 2,370,763
Depreciation and amortization 8,632,481 8,787,240 9,131,442
----------- ----------- -----------
OPERATING LOSS (2,243,001) (2,397,832) (2,216,442)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (2,761,409) (2,016,390) (1,915,945)
Other, net 101,734 4,912 8,995
----------- ----------- -----------
Total other income (expense) (2,659,675) (2,011,478) (1,906,950)
----------- ----------- -----------
CONSOLIDATED LOSS (4,902,676) (4,409,310) (4,123,392)
MINORITY INTEREST IN CONSOLIDATED LOSS 1,949,794 1,753,583 1,639,873
----------- ----------- -----------
NET LOSS $(2,952,882) $(2,655,727) $(2,483,519)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partner $ (29,529) $ (26,557) $ (24,835)
=========== =========== ===========
Limited Partners $(2,923,353) $(2,629,170) $(2,458,684)
=========== =========== ==========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (34.37) $ (30.91) $ (28.91)
=========== =========== ============
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 85,059 85,059 85,059
=========== =========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
20
21
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
-------------------------------------------
1994 1993 1992
----------- ----------- -----------
GENERAL PARTNER:
Balance, beginning of year $ (264,084) $ (211,243) $ (161,523)
Distributions - (26,284) (24,885)
Net loss for year (29,529) (26,557) (24,835)
----------- ----------- -----------
Balance, end of year $ (293,613) $ (264,084) $ (211,243)
=========== =========== ===========
LIMITED PARTNERS:
Balance, beginning of year $ 9,301,541 $14,532,711 $19,454,895
Distributions - (2,602,000) (2,463,500)
Net loss for year (2,923,353) (2,629,170) (2,458,684)
----------- ----------- -----------
Balance, end of year $ 6,378,188 $ 9,301,541 $14,532,711
=========== =========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
21
22
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
---------------------------------------------
1994 1993 1992
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,952,882) $(2,655,727) $(2,483,519)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 8,632,481 8,787,240 9,131,442
Minority interest in consolidated loss (1,949,794) (1,753,583) (1,639,873)
Decrease in accrued distribution to
Venture partner - (1,718,000) (1,574,800)
Distribution to Venture partner (429,500) - -
Amortization of interest rate protection contract 48,500 48,501 -
Increase in trade receivables (27,364) (161,826) (22,724)
Increase in deposits, prepaid
expenses and deferred charges (257,709) (53,521) (94,772)
Increase in accounts payable, accrued
liabilities and subscriber prepayments 296,843 134,542 14,702
Increase (decrease) in advances from General Partner (4,002,248) 3,465,707 16,822
----------- ----------- -----------
Net cash provided by (used in)
operating activities (641,673) 6,093,333 3,347,278
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,601,807) (4,125,320) (4,095,453)
----------- ----------- -----------
Net cash used in investing activities (4,601,807) (4,125,320) (4,095,453)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 6,552,532 794,914 3,674,961
Repayment of debt (467,511) (131,657) (375,396)
Distributions to limited partners - (2,602,000) (2,463,500)
Increase (decrease) in accrued distribution
to limited partners (650,500) - 78,300
Purchase of interest rate protection contract - (145,500) -
----------- ----------- -----------
Net cash provided by (used in)
financing activities 5,434,521 (2,084,243) 914,365
----------- ----------- -----------
Increase (decrease) in cash 191,041 (116,230) 166,190
Cash, beginning of year 118,807 235,037 68,847
----------- ----------- -----------
Cash, end of year $ 309,848 $ 118,807 $ 235,037
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,536,991 $ 1,962,699 $ 1,895,997
=========== =========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.
22
23
JONES CABLE INCOME FUND 1-C
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Jones Cable Income Fund 1-C, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on February 9, l987, under a public program
sponsored by Jones Intercable, Inc. ("Intercable"). The Partnership was formed
to acquire, develop and operate cable television systems. Intercable is the
"General Partner" and manager of the Partnership. The General Partner and its
subsidiaries also own and operate cable television systems. In addition, the
General Partner manages cable television systems for other limited partnerships
for which it is general partner and, also, for other affiliated entities.
On October 31, 1987, Jones Cable Income Fund 1-B, Ltd. and the
Partnership formed a Colorado general partnership known as Jones Cable Income
Fund 1-B/C Venture (the "Venture") by making capital contributions of
$24,220,000 and $36,681,000, respectively (approximately 40 and 60 percent,
respectively). The Venture was formed to acquire, develop and operate cable
television systems. During 1988 and 1987, the Venture acquired various cable
television systems serving the areas in and around Brighton, Broomfield and
Boulder County, Colorado; Lake County, California; Myrtle Creek, Oregon; South
Sioux City, Nebraska; and Three Rivers and Watervliet, Michigan.
Contributed Capital
The capitalization of the Partnership is set forth in the
accompanying consolidated statements of partners' capital (deficit). No
limited partner is obligated to make any additional contributions to
partnership capital.
The General Partner purchased its interest in the Partnership by
contributing $1,000 to partnership capital.
All profits and losses of the Partnership are allocated 99
percent to the limited partners and 1 percent to the General Partner, except
for income or gain from the sale or disposition of cable television properties,
which will be allocated to the partners based upon the formula set forth in the
Partnership Agreement and interest income earned prior to the first acquisition
by the Partnership of a cable television system, which was allocated 100
percent to the limited partners.
Cable Television System Acquisitions
Venture acquisitions were accounted for as purchases with the
purchase prices allocated as follows: first, to the fair value of net tangible
assets acquired; second, to the value of subscriber lists, franchise costs and
a noncompete agreement; and third, to costs in excess of interests in net
assets purchased. Brokerage fees paid to a subsidiary of the General Partner's
parent were allocated to intangible assets based upon the relative value of
these assets at acquisition. Other system acquisition costs were capitalized
and included in the cost of distribution systems.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Records
The accompanying consolidated financial statements have been
prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles. The Partnership's tax returns are also
prepared on the accrual basis.
23
24
Principles of Consolidation
The accompanying consolidated financial statements include 100
percent of the accounts of the Partnership and those of the Venture, reduced by
Jones Cable Income Fund 1-B's approximate 40 percent minority interest in the
Venture.
All interpartnership accounts and transactions have been
eliminated.
Property, Plant and Equipment
Depreciation of property, plant and equipment is provided
primarily using the straight-line method over the following estimated service
lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 - 15 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to franchises, subscriber lists, a noncompete
agreement and costs in excess of interests in net assets purchased are
amortized using the straight-line method over the following remaining estimated
useful lives:
Franchise costs 1 - 16 years
Subscriber lists 1 - 2 years
Noncompete agreement 1 - 4 years
Costs in excess of interests in net
assets purchased 34 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized as
revenue when earned.
Reclassifications
Certain prior year amounts have been reclassified to conform to
the 1994 presentation.
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
The General Partner manages the Partnership and the Venture and
receives a fee for its services equal to 5 percent of the gross revenues of the
Venture, excluding revenues from the sale of cable television systems or
franchises. Management fees paid to the General Partner by the Venture during
the years ended December 31, 1994, 1993 and 1992 were $1,056,089, $1,017,539
and $942,417, respectively.
Any partnership distributions made from cash flow (defined as
cash receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners
and 1 percent to the General Partner. Distributions resulting from the sale or
refinancing of a system or upon dissolution of the Partnership will be made as
follows: first, to the limited partners in an amount which together with all
prior distributions, other than those made regularly from cash flow, will equal
their initial capital contribution; second, payment to the limited partners of
a liquidation preference equal to a 12 percent cumulative return on their
initial capital contribution, reduced by
24
25
all prior distributions from cash flow; and the balance, 75 percent to the
limited partners and 25 percent to the General Partner.
The Venture reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries
and related benefits paid to corporate personnel, rent, data processing
services and other corporate facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Allocations of personnel costs are based
primarily on actual time spent by employees of the General Partner with respect
to each entity managed. Remaining overhead costs are allocated based on
revenue and/or assets managed for the partnership. Effective December 1, 1993,
the allocation method was changed to be based only on revenue, which the
General Partner believes provides a more accurate method of allocation.
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 of allocating overhead and administrative expenses is reasonable.
Overhead and administrative expenses allocated to the Venture by the General
Partner during the years ended December 31, 1994, 1993 and 1992 were
$1,658,710, $1,572,134 and $1,428,346, respectively.
The Venture was charged interest during 1994 at an average
interest rate of 10 percent on the amounts due Intercable, which approximated
Intercable's weighted average cost of borrowing. Total interest charged to the
Venture by Intercable was $ 180,316, $187,959 and $67,841 during 1994, 1993 and
1992, respectively.
Payments to/from Affiliates for Programming Services
The Venture receives programming from Product Information
Network, Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of the General Partner. Payments to Superaudio totaled $25,189,
$26,541 and $33,913 in 1994, 1993 and 1992, respectively. Payments to The Mind
Extension University totaled $33,199, $20,832 and $20,053 in 1994, 1993 and
1992, respectively. Payments to Jones Computer Network, which initiated
service in 1994, totaled $13,218 in 1994. The Venture receives a commission
from Product Information Network based on a percentage of advertising revenues
and number of subscribers. Product Information Network, which initiated
service in 1994, paid commissions to the Venture totalling $15,283 in 1994.
(4) DISTRIBUTIONS FROM CASH FLOW
One of the primary objectives of the Venture is to provide
quarterly cash distributions to the Venture partners. Such cash returns are
primarily from cash generated through operating activities of the Venture. The
Venture's credit facility has a maximum amount available of $45,000,000, of
which $42,100,000 was outstanding on December 31, 1994, which limits the amount
of borrowings available to the Venture to fund capital expenditures; therefore,
the Venture did not declare any distributions in 1994. During 1993 and 1992,
the Venture declared and paid distributions to the Venture partners totaling
$4,320,000 and $4,090,000, respectively. Due to the borrowing limitations
discussed above, the Venture will need to use cash generated from operations to
fund capital expenditures and thus the Venture does not anticipate the
resumption of distributions to the Venture partners in the near term.
The Partnership provides distributions to its limited partners
from distributions it receives from the Venture. The Partnership declared no
distributions in 1994. During 1993 and 1992, the Partnership declared and paid
distributions totalling $2,628,284 and $2,488,385, respectively. The General
Partner has agreed to defer its portion of any distributions from cash flows
until the Partnership is liquidated.
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26
(5)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and 1993,
consisted of the following:
December 31,
----------------------------------
1994 1993
---------------- ----------------
Cable distribution systems $ 52,889,029 $ 48,816,164
Equipment and tools 2,062,435 1,795,192
Office furniture and equipment 673,528 589,766
Buildings 452,428 450,155
Vehicles 1,460,112 1,284,446
Land 169,642 169,642
----------- -----------
57,707,174 53,105,367
Less- accumulated depreciation (24,802,632) (20,804,731)
----------- -----------
$ 32,904,542 $ 32,300,636
=========== ===========
(6) DEBT
Debt consists of the following: December 31,
----------------------------------
1994 1993
---------------- ----------------
Lending institutions -
Revolving credit agreement $42,100,000 $36,000,000
Capital lease obligations 283,339 298,318
---------- ----------
$42,383,339 $36,298,318
========== ==========
In May 1994, the Venture completed renegotiation of its credit
facility to increase the maximum amount available to $45,000,000 and to extend
the revolving credit period to June 30, 1997, at which time the outstanding
balance is payable in full. At December 31, 1994, $42,100,000 was outstanding
on the Venture's credit facility leaving $2,900,000 of available borrowings.
Interest on outstanding principal is calculated at the Venture's option of the
Prime rate plus 1/2 percent or LIBOR plus 1-1/2 percent. The effective
interest rates on amounts outstanding as of December 31, 1994 and 1993 were
7.36 percent and 4.67 percent, respectively.
On January 12, 1993, the Venture entered into an interest rate
cap agreement covering outstanding debt obligations of $15,000,000. The
agreement protects the Venture for LIBOR interest rates that exceed 7 percent
for three years from the date of the agreement.
Installments due on debt principal for each of the five years in
the period ending December 31, 1999, respectively, are $85,002, $85,002,
$42,185,001, $28,334 and $-0-. As of December 31, 1994, substantially all of
the Venture's assets secured the above indebtedness.
(7) INCOME TAXES
Income taxes have not been recorded in the accompanying
consolidated financial statements because they accrue directly to the partners.
The Federal and state income tax returns of the Partnership are prepared and
filed by the General Partner.
The Partnership's tax returns, the qualification of the
Partnership as such for tax purposes, and the amount of distributable
partnership income or loss are subject to examination by Federal and state
taxing authorities. If such examinations result in changes with respect to the
Partnership's qualification as such, or in changes with respect to the
Partnership's recorded income or loss, the tax liability of the General and
limited partners would likely be changed accordingly.
26
27
Taxable loss reported to the partners is different from that
reported in the consolidated statements of operations due to the difference in
depreciation recognized under generally accepted accounting principles and the
expense allowed for tax purposes under the Modified Accelerated Cost Recovery
System (MACRS). There are no other significant differences between taxable
income or loss and the net income or loss reported in the consolidated
statements of operations.
(8) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates. The
Venture has filed cost-of-service showings for its Brighton, Broomfield and
Boulder County, Colorado; Myrtle Creek, Oregon; South Sioux City Nebraska; and
Three Rivers and Watervliet, Michigan systems and thus anticipates no further
reductions in rates in these systems. The cost-of-service showings have not
yet received final approval from franchising authorities, however, and there
can be no assurance that the Venture's cost-of-service showings will prevent
further rate reductions until such final approvals arereceived. The Venture
complied with the February 1994 benchmark regulations and further reduced rates
in its Clearlake Oaks system effective July 1994.
The Venture rents office and other facilities under various
long-term lease arrangements. Rent paid under such lease arrangements totaled
$82,204, $78,616 and $88,074, respectively, for the years ended December 31,
1994, 1993 and 1992. Minimum commitments under operating leases for each of
the five years in the period ending December 31, 1999, and thereafter are as
follows:
1995 $ 74,284
1996 29,038
1997 21,338
1998 21,248
1999 21,248
Thereafter 161,814
-------
$328,970
=======
(9) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective
years is presented below:
Year Ended December 31,
-----------------------------------------------
1994 1993 1992
-------------- -------------- --------------
Maintenance and repairs $ 203,987 $ 226,863 $ 221,292
========= ========= =========
Taxes, other than income and payroll taxes $ 455,044 $ 674,649 $ 621,901
========= ========= =========
Advertising $ 353,212 $ 381,096 $ 375,173
========= ========= =========
Depreciation of property, plant and equipment $4,072,061 $4,225,967 $4,561,026
========= ========= =========
Amortization of intangible assets $4,560,420 $4,561,273 $4,570,416
========= ========= =========
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership itself has no officers or directors. Certain
information concerning the directors and executive officers of the General
Partner is set forth below.
Name Age Positions with the General Partner
---- --- ----------------------------------
Glenn R. Jones 65 Chairman of the Board and Chief
Executive Officer
Derek H. Burney 55 Vice Chairman of the Board
James B. O'Brien 45 President, Chief Operating Officer
and Director
Ruth E. Warren 45 Group Vice President/Operations
Kevin P. Coyle 43 Group Vice President/Finance
Christopher J. Bowick 40 Group Vice President/Technology
Timothy J. Burke 44 Group Vice President/Taxation/
Administration
Raymond L. Vigil 48 Group Vice President/Human Resources
and Director
Cynthia A. Winning 43 Group Vice President/Marketing
Elizabeth M. Steele 43 Vice President/General Counsel/
Secretary
Larry W. Kaschinske 35 Controller
James J. Krejci 53 Director
Christine Jones Marocco 39 Director
Daniel E. Somers 47 Director
Robert S. Zinn 58 Director
David K. Zonker 41 Director
Mr. Glenn R. Jones has served as Chairman of the Board of Directors and
Chief Executive Officer of the General Partner since its formation in 1970, and
he was President from June 1984 until April 1988. Mr. Jones was elected a member
of the Executive Committee of the Board of Directors in April 1985. Mr. Jones is
the sole shareholder, President and Chairman of the Board of Directors of Jones
International, Ltd. He is also Chairman of the Board of Directors of the
subsidiaries of the General Partner and of certain other affiliates of the
General Partner. Mr. Jones has been involved in the cable television business in
various capacities since 1961, is a past and present member of the Board of
Directors of the National Cable Television Association, and is a former member
of its Executive Committee. Mr. Jones is a past director and member of the
Executive Committee of C-Span. Mr. Jones has been the recipient of several
awards including the Grand Tam Award in 1989, the highest award from the Cable
Television Administration and Marketing Society; the Chairman's Award from the
Investment Partnership Association, which is an association of sponsors of
public syndications; the cable television industry's Public Affairs Association
President's Award in 1990, the Donald G. McGannon award for the advancement of
minorities and women in cable; the STAR Award from American Women in Radio and
Television, Inc. for exhibition of a commitment to the issues and concerns of
women in television and radio; and the Women in Cable Accolade in 1990 in
recognition of support of this organization. Mr. Jones is also a founding member
of the James Madison Council of the Library of Congress and is on the Board of
Governors of the American Society of Training and Development.
Mr. Derek H. Burney was appointed a Director of the General Partner in
December 1994 and Vice Chairman of the Board of Directors in January 1995. He is
also a member of the Executive Committee of the Board of Directors. Mr. Burney
joined BCE Inc., Canada's largest telecommunications company, in January
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1993 as Executive Vice President, International. He has been the Chairman of
Bell Canada International Inc., a subsidiary of BCE, since January 1993 and, in
addition, has been Chief Executive Officer of BCI since July 1993. Prior to
joining BCE, Mr. Burney served as Canada's ambassador to the United States from
1989 to 1992. Mr. Burney also served as chief of staff to the Prime Minister of
Canada from March 1987 to January 1989 where he was directly involved with the
negotiation of the U.S. - Canada Free Trade Agreement. In July 1993, he was
named an Officer of the Order of Canada. Mr. Burney is chairman of Bell
Cablemedia plc. He is a director of Mercury Communications Limited, Videotron
Holdings plc, Tele-Direct (Publications) Inc., Teleglobe Inc., Bimcor Inc.,
Maritime Telegraph and Telephone Company, Limited, Moore Corporation Limited and
Northbridge Programming Inc.
Mr. James B. O'Brien, the General Partner's President, joined the
General Partner in January 1982. Prior to being elected President and a Director
of the General Partner in December 1989, Mr. O'Brien served as a Division
Manager, Director of Operations Planning/Assistant to the CEO, Fund Vice
President and Group Vice President/Operations. Mr. O'Brien was appointed to the
General Partner's Executive Committee in August 1993. As President, he is
responsible for the day-to-day operations of the cable television systems
managed and owned by the General Partner. Mr. O'Brien is also President and a
Director of Jones Cable Group, Ltd., Jones Global Funds, Inc. and Jones Global
Management, Inc., all affiliates of the General Partner. Mr. O'Brien is a board
member of Cable Labs, Inc., the research arm of the U.S. cable television
industry. He also serves as a director of the Cable Television Administration
and Marketing Association and as a director of the Walter Kaitz Foundation, a
foundation that places people of any ethnic minority group in positions with
cable television systems, networks and vendor companies.
Ms. Ruth E. Warren joined the General Partner in August 1980 and has
served in various operational capacities, including system manager and Fund Vice
President, since then. Ms. Warren was elected Group Vice President/Operations of
the General Partner in September 1990.
Mr. Kevin P. Coyle joined The Jones Group, Ltd. in July 1981 as Vice
President/Financial Services. In September 1985, he was appointed Senior Vice
President/Financial Services. He was elected Treasurer of the General Partner in
August 1987, Vice President/Treasurer in April 1988 and Group Vice
President/Finance and Chief Financial Officer in October 1990.
Mr. Christopher J. Bowick joined the General Partner in September 1991
as Group Vice President/Technology and Chief Technical Officer. Previous to
joining the General Partner, Mr. Bowick worked for Scientific Atlanta's
Transmission Systems Business Division in various technical management
capacities since 1981, and as Vice President of Engineering since 1989.
Mr. Timothy J. Burke joined the General Partner in August 1982 as
corporate tax manager, was elected Vice President/Taxation in November 1986 and
Group Vice President/Taxation/Administration in October 1990.
Mr. Raymond L. Vigil joined the General Partner in June 1993 as Group
Vice President/Human Resources. Previous to joining the General Partner, Mr.
Vigil served as Executive Director of Learning with USWest. Prior to USWest, Mr.
Vigil worked in various human resources posts over a 14-year term with the IBM
Corporation.
Ms. Cynthia A. Winning joined the General Partner as Group Vice
President/Marketing in December 1994. Previous to joining the General Partner,
Ms. Winning served since 1994 as the President of PRS Inc., Denver, Colorado, a
sports and event marketing company. From 1979 to 1981 and from 1986 to 1994, Ms.
Winning served as the Vice President and Director of Marketing for Citicorp
Retail Services, Inc., a provider of private-label credit cards for ten national
retail department store chains. From 1981 to 1986, Ms. Winning was the Director
of Marketing Services for Daniels & Associates cable television operations, as
well as the Western Division Marketing Director for Capital Cities Cable. Ms.
Winning also serves as a board Member of Cities in Schools, a dropout
intervention/prevention program.
29
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Ms. Elizabeth M. Steele joined the General Partner in August 1987 as
Vice President/General Counsel and Secretary. From August 1980 until joining the
General Partner, Ms. Steele was an associate and then a partner at the Denver
law firm of Davis, Graham & Stubbs, which serves as counsel to the General
Partner.
Mr. Larry Kaschinske joined the General Partner in 1984 as a staff
accountant in the General Partner's former Wisconsin Division; was promoted to
Assistant Controller in 1990 and named Controller in August 1994.
Mr. James J. Krejci was President of the International Division of
International Gaming Technology International headquartered in Reno, Nevada,
until March 1995. Prior to joining IGT in May 1994, Mr. Krejci was Group Vice
President of Jones International, Ltd. and a Group Vice President of the General
Partner. Prior to May 1994, he also served as Group Vice President of Jones
Futurex, Inc., an affiliate of the General Partner engaged in manufacturing and
marketing data encryption devices, Jones Interactive, Inc., a subsidiary of
Jones International, Ltd. providing computer data and billing processing
facilities and Jones Lightwave, Ltd., a company owned by Jones International,
Ltd. and Mr. Jones, which is engaged in the provision of telecommunications
services. Mr. Krejci has been a Director of the General Partner since August
1987.
Ms. Christine Jones Marocco was appointed a Director of the General
Partner in December 1994. She is the daughter of Glenn R. Jones. Ms. Marocco is
also a director of Jones International, Ltd.
Mr. Daniel E. Somers was appointed a Director of the General Partner in
December 1994 and also serves on the General Partner's Audit Committee. From
January 1992 to January 1995, Mr. Somers worked as Senior Vice President and
Chief Financial Officer of Bell Canada International Inc. and was appointed
Executive Vice President and Chief Financial Officer on February 1, 1995. He is
also a Director of certain of its affiliates. Prior to joining Bell Canada
International Inc. and since January 1989, Mr. Somers was the President and
Chief Executive Officer of Radio Atlantic Holdings Limited. Mr. Somers is a
member of the North American Society of Corporate Planning, the Financial
Executives Institution and the Financial Analysts Federation.
Mr. Robert S. Zinn was appointed a Director of the General Partner in
December 1994. Mr. Zinn joined the General Partner in January 1991 and is a
member of its Legal Department. He is also Vice President/Legal Affairs of Jones
International, Ltd. Prior to joining the General Partner, Mr. Zinn was in
private law practice in Denver, Colorado for over 25 years.
Mr. David K. Zonker was appointed a Director of the General Partner in
December 1994. Mr. Zonker has been the President of Jones International
Securities, Ltd., a subsidiary of Jones International, Ltd. since January 1984
and he has been its Chief Executive Officer since January 1988. From October
1980 until joining Jones International Securities, Ltd. in January 1984, Mr.
Zonker was employed by the General Partner. Mr. Zonker is a member of the Board
of Directors of various affiliates of the General Partner, including Jones
International Securities, Ltd. Mr. Zonker is licensed by the National
Association of Securities Dealers, Inc. and he is a past chairman of the
Investment Program Association, a trade organization based in Washington, D.C.
that promotes direct investments. He is a member of the Board of Trustees of
Graceland College, Lamoni, Iowa; the International Association of Financial
Planners and the American and Colorado Institutes of Certified Public
Accountants.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate the Manitowoc System. Such personnel are employed by the
General Partner and, pursuant to the terms of the limited partnership agreement
of the Partnership, the cost of such employment is charged by the General
Partner to the Partnership as a direct reimbursement item. See Item 13.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited partnership
interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner and its affiliates engage in certain transactions
with the Partnership and the Venture. The General Partner believes that the
terms of such transactions are generally as favorable as could be obtained by
the Partnership and the Venture from unaffiliated parties. This determination
has been made by the General Partner in good faith, but none of the terms were
or will be negotiated at arm's-length and there can be no assurance that the
terms of such transactions have been or will be as favorable as those that could
have been obtained by the Partnership or the Venture from unaffiliated parties.
The General Partner charges a management fee, and the General Partner
is reimbursed for certain allocated overhead and administrative expenses. These
expenses consist primarily of salaries and benefits paid to corporate
personnel, rent, data processing services and other facilities costs. Such
personnel provide engineering, marketing, administrative, accounting, legal and
investor relations services. Allocations of personnel costs are based primarily
on actual time spent by employees of the General Partner. Remaining overhead
costs are allocated based on revenues and/or the costs of assets managed.
Systems owned by the General Partner and all other systems owned by
partnerships for which Jones Intercable, Inc. is the general partner, are also
allocated a proportionate share of these expenses.
The General Partner also advances funds and charges interest on the
balance payable. The interest rate charged approximates the General Partner's
weighted average cost of borrowing.
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the General Partner, and computer video
programming from Jones Computer Network, Ltd., an affiliate of the General
Partner, for fees based upon the number of subscribers receiving the
programming.
Product Information Network ("PIN"), an affiliate of the General
Partner, provides advertising time for third parties on the Systems. In
consideration, the revenues generated from the third parties are shared
two-thirds and one-third between PIN and the Venture. During the year ended
December 31, 1994, the Venture received revenues from PIN of $15,283.
The charges to the Venture for related party transactions are as
follows for the periods indicated:
At December 31,
------------------------------------------------------
1994 1993 1992
---- ---- ----
Management fees $ 1,056,089 $ 1,017,539 $ 942,417
Allocation of expenses 1,658,710 1,572,134 1,428,346
Interest expense 180,316 187,959 67,841
Amount of notes and advances outstanding 66,224 4,068,472 602,765
Highest amount of notes and advances outstanding 5,126,872 4,068,472 1,935,501
Programming fees:
Superaudio 25,189 26,541 33,913
Mind Extension University 33,199 20,832 20,053
Jones Computer Network 13,218 -0- -0-
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PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)1. See index to financial statements for a list of financial statements and exhibits
thereto filed as a part of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement of Jones Cable Income Fund 1-C, Ltd. (1)
4.2 Joint Venture Agreement of Jones Cable Income Fund 1-B/C Venture. (1)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Clearlake, California. (1)
10.1.2 Copy of a franchise and related documents thereto granting a community antenna
television franchise for Lake County, California. (1)
10.1.3 Copy of Resolution 91-31 amending the Lake County, California franchise. (2)
10.1.4 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Lakeport, California. (1)
10.1.5 Copy of a franchise and related documents thereto granting a community antenna
television franchise for Adams County, Colorado. (1)
10.1.6 Copies of Utility/Construction Permits for Boulder County, Colorado. (1)
10.1.7 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Brighton, Colorado. (1)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Broomfield, Colorado. (2)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
Television system franchise for Weld County, Colorado. (Fund 1-B/C) (1)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Brady, Michigan. (3)
10.1.10 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Calvin, Michigan. (4)
10.1.11 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Centreville, Michigan. (5)
10.1.12 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Coloma, Michigan. (5)
10.1.13 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Coloma, Michigan. (2)
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33
10.1.14 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Constantine, Michigan. (5)
10.1.15 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Constantine, Michigan. (5)
10.1.16 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Dowagiac, Michigan. (5)
10.1.17 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Elkhart, Michigan. (5)
10.1.18 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Fabius, Michigan. (5)
10.1.19 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Flowerfield, Michigan. (Fund 1-B/C). (5)
10.1.20 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Hagar, Michigan. (Fund 1-B/C) (3)
10.1.21 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Hartford, Michigan. (Fund 1-B/C) (4)
10.1.22 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of LaGrange, Michigan. (Fund 1-B/C) (3)
10.1.23 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Lockport, Michigan. (Fund 1-B/C) (3)
10.1.24 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Mendon, Michigan. (Fund 1-B/C) (3)
10.1.25 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Mottville, Michigan. (Fund 1-B/C) (3)
10.1.26 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Newberg, Michigan. (4)
10.1.27 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Nottawa, Michigan. (5)
10.1.28 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Park, Michigan. (5)
10.1.29 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pavillion, Michigan. (5)
10.1.30 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Penn, Michigan. (6)
10.1.31 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pipestone, Michigan. (4)
33
34
10.1.32 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pokagon, Michigan. (4)
10.1.33 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Porter, Michigan. (6)
10.1.34 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Schoolcraft, Michigan. (4)
10.1.35 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Sherman, Michigan. (6)
10.1.36 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Silvercreek, Michigan. (5)
10.1.37 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Three Rivers, Michigan. (5)
10.1.38 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Vandalia, Michigan. (2)
10.1.39 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Vicksburg, Michigan. (5)
10.1.40 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Watervliet, Michigan. (5)
10.1.41 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Watervliet, Michigan. (5)
10.1.42 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Wayne, Michigan. (5)
10.1.43 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of White Pigeon, Michigan. (5)
10.1.44 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of White Pigeon, Michigan. (5)
10.1.45 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Dakota City, Nebraska. (1)
10.1.46 Copy of Service Permit granted by Dakota County, Nebraska Board of County Commissioners.
(1)
10.1.47 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Homer, Nebraska. (1)
10.1.48 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for South Sioux City, Nebraska. (1)
10.1.49 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Walthill, Nebraska. (2)
34
35
10.1.50 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Walthill, Nebraska. (1)
10.1.51 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Canyonville, Oregon. (1)
10.1.52 Copy of resolution amending the franchise for the City of Canyonville, Oregon. (2)
10.1.53 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Myrtle Creek, Oregon. (1)
10.1.59 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Riddle, Oregon. (2)
10.1.60 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Winston, Oregon. (1)
10.2.1 Amended and Restated Revolving Credit Agreement dated September 30, 1994 between Jones
Cable Income Fund 1-B/C Venture, Corestates Bank, N.A., First National Bank of Maryland,
Dresdner Bank AG and Continental Bank.
27 Financial Data Schedule
----------------
(1) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1987.
(2) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1992.
(3) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1993.
(4) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1990.
(5) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1988.
(6) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1989.
(b) Reports on Form 8-K.
None.
35
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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-C, LTD.
a Colorado limited partnership
By: Jones Intercable, Inc.
By: /s/ Glenn R. Jones
-------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Dated: March 27, 1995 Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Glenn R. Jones
------------------------------
Glenn R. Jones
Chairman of the Board and Chief
Executive Officer
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
-------------------------------
Kevin P. Coyle
Group Vice President/Finance
Dated: March 27, 1995 (Principal Financial Officer)
By: /s/ Larry Kaschinske
-------------------------------
Larry Kaschinske
Controller
Dated: March 27, 1995 (Principal Accounting Officer)
By: /s/ James B. O'Brien
-------------------------------
James B. O'Brien
Dated: March 27, 1995 President and Director
By: /s/ Raymond L. Vigil
-------------------------------
Raymond L. Vigil
Dated: March 27, 1995 Group Vice President and
Director
By: /s/ Robert S. Zinn
-------------------------------
Robert S. Zinn
Dated: March 27, 1995 Director
36
37
By: /s/ David K. Zonker
-------------------------------
David K. Zonker
Dated: March 27, 1995 Director
By:
-------------------------------
Derek H. Burney
Dated: Director
By:
-------------------------------
James J. Krejci
Dated: Director
By:
-------------------------------
Christine Jones Marocco
Dated: Director
By:
-------------------------------
Daniel E. Somers
Dated: Director
37
38
EXHIBIT INDEX
Exhibit Page
------- ----
4.1 Limited Partnership Agreement of Jones Cable Income Fund 1-C, Ltd. (1)
4.2 Joint Venture Agreement of Jones Cable Income Fund 1-B/C Venture. (1)
10.1.1 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Clearlake, California. (1)
10.1.2 Copy of a franchise and related documents thereto granting a community antenna
television franchise for Lake County, California. (1)
10.1.3 Copy of Resolution 91-31 amending the Lake County, California franchise. (2)
10.1.4 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Lakeport, California. (1)
10.1.5 Copy of a franchise and related documents thereto granting a community antenna
television franchise for Adams County, Colorado. (1)
10.1.6 Copies of Utility/Construction Permits for Boulder County, Colorado. (1)
10.1.7 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Brighton, Colorado. (1)
10.1.8 Copy of a franchise and related documents thereto granting a community antenna
television franchise for the City of Broomfield, Colorado. (2)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
Television system franchise for Weld County, Colorado. (Fund 1-B/C) (1)
10.1.9 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Brady, Michigan. (3)
10.1.10 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Calvin, Michigan. (4)
10.1.11 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Centreville, Michigan. (5)
10.1.12 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Coloma, Michigan. (5)
10.1.13 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Coloma, Michigan. (2)
39
Exhibit Page
------- ----
10.1.14 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Constantine, Michigan. (5)
10.1.15 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Constantine, Michigan. (5)
10.1.16 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Dowagiac, Michigan. (5)
10.1.17 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of Elkhart, Michigan. (5)
10.1.18 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Fabius, Michigan. (5)
10.1.19 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Flowerfield, Michigan. (Fund 1-B/C). (5)
10.1.20 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Hagar, Michigan. (Fund 1-B/C) (3)
10.1.21 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Hartford, Michigan. (Fund 1-B/C) (4)
10.1.22 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the County of LaGrange, Michigan. (Fund 1-B/C) (3)
10.1.23 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Lockport, Michigan. (Fund 1-B/C) (3)
10.1.24 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Mendon, Michigan. (Fund 1-B/C) (3)
10.1.25 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Mottville, Michigan. (Fund 1-B/C) (3)
10.1.26 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Newberg, Michigan. (4)
10.1.27 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Nottawa, Michigan. (5)
10.1.28 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Park, Michigan. (5)
10.1.29 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pavillion, Michigan. (5)
10.1.30 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Penn, Michigan. (6)
10.1.31 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pipestone, Michigan. (4)
40
Exhibit Page
------- ----
10.1.32 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Pokagon, Michigan. (4)
10.1.33 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Porter, Michigan. (6)
10.1.34 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Schoolcraft, Michigan. (4)
10.1.35 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Sherman, Michigan. (6)
10.1.36 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Silvercreek, Michigan. (5)
10.1.37 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Three Rivers, Michigan. (5)
10.1.38 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Vandalia, Michigan. (2)
10.1.39 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Vicksburg, Michigan. (5)
10.1.40 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Watervliet, Michigan. (5)
10.1.41 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Watervliet, Michigan. (5)
10.1.42 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of Wayne, Michigan. (5)
10.1.43 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Township of White Pigeon, Michigan. (5)
10.1.44 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of White Pigeon, Michigan. (5)
10.1.45 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for Dakota City, Nebraska. (1)
10.1.46 Copy of Service Permit granted by Dakota County, Nebraska Board of County Commissioners.
(1)
10.1.47 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Homer, Nebraska. (1)
10.1.48 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for South Sioux City, Nebraska. (1)
10.1.49 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Walthill, Nebraska. (2)
41
Exhibit Page
------- ----
10.1.50 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the Village of Walthill, Nebraska. (1)
10.1.51 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Canyonville, Oregon. (1)
10.1.52 Copy of resolution amending the franchise for the City of Canyonville, Oregon. (2)
10.1.53 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Myrtle Creek, Oregon. (1)
10.1.59 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Riddle, Oregon. (2)
10.1.60 Copy of a franchise and related documents thereto granting a community antenna
television system franchise for the City of Winston, Oregon. (1)
10.2.1 Amended and Restated Revolving Credit Agreement dated September 30, 1994 between Jones
Cable Income Fund 1-B/C Venture, Corestates Bank, N.A., First National Bank of Maryland,
Dresdner Bank AG and Continental Bank.
27 Financial Data Schedule
----------------
(1) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1987.
(2) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1992.
(3) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1993.
(4) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1990.
(5) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1988.
(6) Incorporated by reference from Registrant's Report on Form 10-K for the fiscal year
ended December 31, 1989.