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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number: 0-14906
JONES CABLE INCOME FUND 1-B, LTD.-
Exact name of registrant as specified in charter
Colorado 84-1010417
State of organization I.R.S. employer I.D.#
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
Address of principal executive office
(303) 792-3111
Registrant's telephone number
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
June 30, December 31,
ASSETS 1995 1994
----------- ------------
CASH $ 677,521 $ 116,839
RECEIVABLES:
Trade receivables, less allowance for doubtful receivables
of $27,052 and $14,323 at June 30, 1995 and
December 31, 1994, respectively 132,618 167,587
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 11,426,632 10,801,551
Less - accumulated depreciation (5,411,999) (4,948,058)
---------- ----------
6,014,633 5,853,493
Subscriber lists, net of accumulated amortization of $3,211,334 and
$3,024,266 at June 30, 1995 and December 31, 1994, respectively 1,340,666 1,527,734
Favorable leaseholds, net of accumulated amortization of $102,794
and $96,806 at June 30, 1995 and December 31, 1994, respectively 54,906 60,894
Cost in excess of interests in net assets purchased, net of accumulated
amortization of $10,506 and $9,894 at June 30, 1995 and December 31,
1994, respectively 38,394 39,006
Investment in cable television joint venture 3,037,518 4,086,463
---------- ----------
Total investment in cable television properties 10,486,117 11,567,590
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 55,239 22,362
---------- ----------
Total assets $11,351,495 $11,874,378
========== ==========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
June 30, December 31,
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1995 1994
------------ ------------
LIABILITIES:
Debt $ 6,581,516 $ 3,544,000
Accounts payable--
Trade -- 5,046
General Partner 219,572 2,162,870
Accrued liabilities 470,268 433,865
Accrued distribution to
limited partners 250,000 --
Subscriber prepayments 41,157 42,814
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Total liabilities 7,562,513 6,188,595
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PARTNERS' CAPITAL (DEFICIT):
General Partner--
Contributed capital 1,000 1,000
Accumulated deficit (191,571) (177,653)
Distributions (105,169) (100,119)
----------- -----------
(295,740) (276,772)
----------- -----------
Limited Partners--
Net contributed capital
(83,884 units outstanding at
June 30, 1995 and December 31, 1994) 34,449,671 34,449,671
Accumulated deficit 18,847,243 (17,469,410)
Distributions (11,517,706) (11,017,706)
----------- -----------
4,084,722 5,962,555
----------- -----------
Total liabilities and partners'
capital (deficit) $ 11,351,495 $ 11,874,378
=========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- ----------------------------
1995 1994 1995 1994
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REVENUES $1,232,710 $1,107,822 $ 2,411,465 $ 2,189,684
COSTS AND EXPENSES:
Operating expense 769,420 666,923 1,542,136 1,314,686
Management fees and allocated
overhead from General Partner 144,399 139,375 295,583 278,571
Depreciation and amortization 335,003 340,743 669,807 735,149
--------- --------- ---------- ----------
OPERATING LOSS (16,112) (39,219) (96,061) (138,722)
--------- --------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (130,933) (97,932) (253,512) (187,464)
Other, net (1,394) (30,769) (205) (46,744)
--------- --------- ---------- ----------
Total other income (expense), net (132,327) (128,701) (253,717) (234,208)
--------- --------- ---------- ----------
LOSS BEFORE EQUITY
IN NET LOSS OF CABLE
TELEVISION JOINT VENTURE (148,439) (167,920) (349,778) (372,930)
EQUITY IN NET LOSS OF
CABLE TELEVISION JOINT
VENTURE (393,140) (438,950) (1,041,973) (933,065)
--------- --------- ---------- ----------
NET LOSS $ (541,579) $ (606,870) $(1,391,751) $(1,305,995)
========= ========= ========== ==========
ALLOCATION OF NET LOSS:
General Partner $ (5,416) $ (6,069) $ (13,918) $ (13,060)
========= ========= ========== ==========
Limited Partners $ (536,163) $ (600,801) $(1,377,833) $(1,292,935)
========= ========= ========== ==========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (6.40) $ (7.16) $ (16.43) $ (15.41)
========= ========= ========== ==========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 83,884 83,884 83,884 83,884
========= ========== ========== ==========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30,
----------------------------------
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,391,751) $(1,305,995)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 669,807 735,149
Equity in net loss of cable television
joint venture 1,041,973 933,065
Decrease (increase) in trade receivables 34,969 (13,915)
Increase in deposits, prepaid expenses
and deferred charges (32,877) (4,178)
Increase (decrease) in accounts payable,
accrued liabilities and subscriber prepayments 19,424 (42,658)
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Net cash provided by operating activities 341,545 301,468
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (625,081) (455,792)
Decrease in distributions receivable from cable
television joint venture -- 429,500
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Net cash used in investing activities (625,081) (26,292)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 6,552,071 16,830
Repayment of debt (3,514,555) (10,118)
Distributions to limited partners (500,000) --
Increase (decrease) in accrued distributions 250,000 (429,500)
Increase (decrease) in advances from General Partner (1,943,298) 191,053
---------- ----------
Net cash provided by (used in) financing activities 844,218 (231,735)
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Increase in cash 560,682 43,441
Cash, beginning of period 116,839 44,489
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Cash, end of period $ 677,521 $ 87,930
========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 111,391 $ 186,679
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The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a fair presentation of the Balance Sheets and
Statements of Operations and Cash Flows in conformity with generally accepted
accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of Jones Cable Income Fund
1-B, Ltd. (the "Partnership") at June 30, 1995 and December 31, 1994 and its
Statements of Operations for the three and six month periods ended June 30,
1995 and 1994 and its Statements of Cash Flows for the six month periods ended
June 30, 1995 and 1994. Results of operations for these periods are not
necessarily indicative of results to be expected for the full year.
The Partnership owns and operates the cable television system serving
the areas in and around Orangeburg, South Carolina (the "Orangeburg System").
In addition, the Partnership owns an approximate 40 percent interest in Jones
Cable Income Fund 1-B/C Venture (the "Venture"). The Venture owns and operates
the cable television systems serving the areas in and around Brighton and
Broomfield, Colorado; Lake County, California; Myrtle Creek, Oregon; South
Sioux City, Nebraska; and Three Rivers and Watervliet, Michigan.
(2) Jones Intercable, Inc., a publicly held Colorado corporation (the
"General Partner"), manages the Partnership and receives a fee for its services
equal to 5 percent of the gross revenues of the Partnership, excluding revenues
from the sale of cable television systems or franchises. Management fees for
the three and six month periods ended June 30, 1995 (exclusive of the
Partnership's approximate 40 percent interest in the Venture) were $61,635 and
$120,573, as compared to $55,391 and $109,484, respectively, for the similar
1994 periods.
The Partnership reimburses the General Partner for certain allocated
overhead and administrative expenses. These expenses represent salaries and
benefits paid to corporate personnel, rent, data processing and other corporate
facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of the General Partner with respect to each partnership
managed. Remaining expenses are allocated based on the pro rata relationship
of the Partnership's revenues to the total revenues of all systems owned or
managed by the General Partner and certain of its subsidiaries. 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 believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Amounts charged the Partnership by the General Partner for
allocated overhead and administrative expenses for the three and six month
periods ending June 30, 1995 (exclusive of the Partnership's approximate 40
percent interest in the Venture) were $82,764 and $175,010, as compared to
$83,984 and $169,087, respectively, for the similar 1994 periods.
(3) In August, 1995, the Partnership entered into a purchase and sales
agreement with the General Partner, providing for the sale by the Partnership
to the General Partner of the Orangeburg System. The sales price is
$18,347,667, which is the average of three separate, independent appraisals of
the fair market value of the Orangeburg System. Proceeds from the sale of the
Orangeburg System will be used to repay Partnership debt of approximately
$6,500,000 with the remainder distributed to limited partners pursuant to the
partnership agreement. It is anticipated that such distribution to limited
partners will total approximately $11,600,000, or $278 per $1,000 invested in
the Partnership. This amount is in addition to the $316 per $1,000 invested in
the Partnership already returned to the limited partners through prior
distributions. The Partnership will retain its interest in the Venture. No
vote of the limited partners of the Partnership is required in connection with
this transaction because the assets of the Orangeburg System do not constitute
all or substantially all of the Partnership's assets.
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(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
ASSETS June 30, 1995 December 31, 1994
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Cash and accounts receivable $ 1,062,819 $ 769,260
Investment in cable television properties 51,068,620 53,281,053
Other assets 369,143 495,461
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Total assets $ 52,500,582 $ 54,545,774
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Debt $ 43,065,489 $ 42,383,339
Payables and accrued liabilities 1,514,640 1,876,289
Partners' contributed capital 39,504,008 39,504,008
Accumulated deficit (31,583,555) (29,217,862)
----------- -----------
Total liabilities and partners' capital $ 52,500,582 $ 54,545,774
=========== ===========
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
Revenues $ 5,760,706 $ 5,312,929 $11,203,617 $10,492,177
Operating expenses (2,977,878) (2,927,227) (6,259,890) (5,933,130)
Management fees and allocated overhead from
Jones Intercable, Inc. (670,333) (668,441) (1,367,298) (1,346,795)
Depreciation and amortization (2,221,415) (2,144,934) (4,443,212) (4,318,763)
---------- ---------- ---------- ----------
Operating loss (108,920) (427,673) (866,783) (1,106,511)
Interest expense (906,623) (644,246) (1,775,116) (1,210,217)
Other, net 27,010 (31,804) 21,902 (29,426)
---------- ---------- ---------- ----------
Net loss $ (988,533) $(1,103,723) $(2,619,997) $(2,346,154)
========= ========== ========== ==========
Management fees paid to the General Partner by the Venture totaled
$288,036 and $560,181, respectively, for the three and six months ended June 30,
1995 as compared to $265,646 and $524,609, respectively, for the similar 1994
periods. Reimbursements for overhead and administrative expenses totaled
$382,297 and $807,117, respectively, for the three and six months ended June 30,
1995 as compared to $402,795 and $822,186, respectively, for the similar 1994
periods. Management fees paid by the Venture and attributable to the
Partnership totaled $114,552 and $222,784, respectively, for the three and six
months ended June 30, 1995 as compared to $105,647 and $208,637, respectively,
for the similar 1994 periods. Reimbursements for overhead and administrative
expenses attributable to the Partnership totaled $152,040 and $320,990,
respectively, for the three and six months ended June 30, 1995 as compared to
$160,192 and $326,983, respectively, for the similar 1994 periods.
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JONES CABLE INCOME FUND 1-B, LTD.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership
For the six months ended June 30, 1995, the Partnership generated cash
from operating activities totaling $341,545, which is available to fund the
capital requirements of the Partnership. During the first six months of 1995,
approximately $682,000 was expended for capital improvements within the
Partnership's Orangeburg System. Construction of cable television plant
extensions accounted for approximately 27 percent of the expenditures.
Approximately 21 percent of these expenditures related to service drops to
homes. Approximately 16 percent of these expenditures related to the purchase
of converters. The remainder of the expenditures were for various enhancements
in the Orangeburg System. These expenditures were funded by cash generated
from operations and advances from the General Partner. Anticipated capital
expenditures for the remainder of 1995 are approximately $158,000. Of this
total, approximately 37 percent is expected to relate to cable plant
extensions, approximately 20 percent is for service drops to homes. The
remainder of the expenditures is expected to be used for various system
enhancements. Funding for these expenditures is expected to be provided by
cash generated from operations and, in its discretion, advances from the
General Partner.
In January 1995, the General Partner completed negotiations for a new
revolving credit facility with a maximum amount available of $8,500,000. The
partnership borrowed $5,800,000 to repay the then-outstanding balance of
$3,500,000 under the prior credit facility and to repay the General Partner its
advances. At June 30, 1995, $6,500,000 was outstanding, leaving $2,000,000 of
borrowings available. The revolving credit facility converts to a term loan on
December 31, 1997 at which time the then-outstanding loan balance will be due
in 20 consecutive quarterly installments beginning March 31, 1998. Interest on
the revolving credit facility is at the Partnership's option of the Prime rate
plus 1/4 percent or the London Interbank Offered Rate plus 1-1/2 percent. The
effective interest rates on outstanding obligations were 8.08 percent and 4.88
percent, respectively, at March 31, 1995 and 1994. The outstanding balance
will be paid in full upon the sale of the Orangeburg System.
In August, 1995, the Partnership entered into a purchase and sales
agreement with the General Partner, providing for the sale by the Partnership
to the General Partner of the Orangeburg System. The sales price is
$18,347,667, which is the average of three separate, independent appraisals of
the fair market value of the Orangeburg System. Proceeds from the sale of the
Orangeburg System will be used to repay Partnership debt of approximately
$6,500,000 with the remainder distributed to limited partners pursuant to the
partnership agreement. It is anticipated that such distribution to limited
partners will total approximately $11,600,000, or $278 per $1,000 invested in
the Partnership. This amount is in addition to the $316 per $1,000 invested in
the Partnership already returned to the limited partners through prior
distributions. The Partnership will retain its interest in the Venture. No
vote of the limited partners of the Partnership is required in connection with
this transaction because the assets of the Orangeburg System do not constitute
all or substantially all of the Partnership's assets.
One of the primary objectives of the Partnership is to provide
quarterly distributions from cash flow. In January 1995, the Partnership
completed negotiations for a new revolving credit agreement that is providing
liquidity to fund capital expenditures. In March 1995 and June 1995, the
Partnership declared $250,000 in distributions for each of the two quarters then
ended. The Partnership will continue to provide some level of distributions
from cash generated from operations until the Orangeburg System is sold.
Subsequent to the sale of the Orangeburg System, distributions will be limited
to only the distributions received by the Partnership from the Venture. The
Venture is not making distributions currently and does not anticipate the
resumption of distributions in the near term. No determination has been made
regarding the level of the future distributions. The level of distributions,
if any, will be determined on a quarter-by-quarter basis.
The Venture
In addition to the Orangeburg System, the Partnership owns an
approximate 40 percent interest in Jones Cable Income Fund 1-B/C Venture (the
"Venture"). The investment is accounted for under the equity method. When
compared to the December 31, 1994 balance, this investment has decreased by
$1,041,973. This decrease represents the Partnership's proportionate share of
losses generated by the Venture during the first six months of 1995. The
Venture's losses, which are principally the result of depreciation and
amortization charges, are expected to continue throughout the remainder of
1995.
For the six months ended June 30, 1995, the Venture generated net cash
from operating activities totaling $1,883,923, which is available to fund
capital expenditures and non-operating costs. During the first six months of
1995, capital improvements within the Venture's systems totaled approximately
$2,256,000. Approximately 22 percent of these expenditures were for service
drops to homes, approximately 22 percent were for pay security and
approximately 8 percent were for the rebuild and upgrade of the Venture's
Systems. The remainder of these expenditures related to various
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enhancements in all of the Venture's systems. Funding for these expenditures
was provided by cash generated from operations and borrowings under the
Venture's credit facility. Anticipated capital expenditures for the remainder
of 1995 are approximately $2,829,000. System upgrades and rebuilds are
expected to account for approximately 32 percent of the expenditures, and
service drops to homes are expected to account for approximately 21 percent of
the anticipated expenditures. The remainder of the expenditures will be for
various enhancements in the Venture's systems. Funding for these expenditures
is expected to be provided by cash generated from operations and available
borrowings from the Venture's credit facility.
At June 30, 1995, the Venture's $45,000,000 credit facility had
$42,700,000 outstanding, leaving $2,300,000 of available borrowings. The
revolving credit facility matures on June 30, 1997, at which time the
outstanding balance is payable in full. 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
June 30, 1995 and 1994 were 7.81 percent and 6.16 percent, respectively.
In January 1993, the Venture entered into an interest rate cap
agreement covering outstanding debt obligations of $15,000,000. The Venture
paid a fee of $145,500. The agreement protects the Venture for LIBOR interest
rates that exceed 7 percent for three years from the date of the agreement.
One of the primary objectives of the Venture is to provide quarterly
cash distributions to the Venture's partners, primarily from cash generated
through operating activities of the Venture. The Venture's partners in turn
seek to provide quarterly cash distributions to their limited partners. The
Venture's credit facility has a maximum amount available of $45,000,000, of
which $42,700,000 was outstanding on June 30, 1995. This limits the amount of
borrowing available to the Venture to fund capital expenditures; therefore, the
Venture used cash generated from operations to fund capital expenditures and
did not declare any distributions during the first and second quarters of 1995.
Due to these borrowing limitations, the Venture will need to use cash generated
from operations to fund capital expenditures and the Venture does not
anticipate the resumption of distributions to the Venture partners in the near
term.
The General Partner believes that the Partnership and the Venture have
sufficient sources of capital available from cash generated from operations and
from borrowings available under its credit facility to meet its presently
anticipated needs so long as the Venture does not resume cash distributions.
RESULTS OF OPERATIONS
The Partnership
Revenues of the Partnership's Orangeburg System increased $124,888, or
approximately 11 percent, to $1,232,710 for the three months ended at June 30,
1995 from $1,107,822 at June 30, 1994. For the six month periods, revenues
increased $221,781, or approximately 10 percent, to $2,411,465 at June 30, 1995
from $2,189,684 at June 30, 1994. An increase in the number of basic
subscribers combined with basic service rate adjustments implemented in the
Orangeburg System primarily accounted for the increases in revenues. The
increase in the number of basic subscribers accounted for approximately 25
percent and 24 percent of the increase in revenues for the three and six months
ended June 30, 1995 and the basic service rate adjustments accounted for
approximately 29 percent and 6 percent of the increase in revenues for the
similar periods. Since June 30, 1994, the Partnership has added 639 basic
subscribers, representing an increase of approximately 5 percent. The number
of basic subscribers increased to 12,358 at June 30, 1995 from 11,719 at June
30, 1994. No other individual factor was significant to the change in
revenues.
Operating expenses consist primarily of costs associated with the
administration of the Partnership's cable television systems. The principal
cost components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
Operating expenses increased $102,497, or approximately 15 percent, to
$769,420 for the three months ended June 30, 1995 from $666,923 at June 30,
1994. For the six month periods ended June 30, 1995 and 1994, operating
expenses increased $227,450, or approximately 17 percent, to $1,542,136 at June
30, 1995 from $1,314,686 at June 30, 1994. Operating expenses represented 62
percent and 64 percent of revenues for the three and six months periods of 1995
compared to 60 percent and 60 percent, respectively, for the three and six
months ended June 30, 1994. The
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increases in operating expenses were primarily due to increases in personnel
costs and programming expenses. No other individual factor significantly
affected the increases in expenses.
Management fees and allocated overhead from the General Partner
increased $5,024, or approximately 4 percent, to $144,399 at June 30, 1995 from
$139,375 at June 30, 1994. For the six months ended June 30, 1995 and 1994,
management fees and allocated overhead from the General Partner increased
$17,012, or approximately 6 percent, to $295,583 in 1995 from $278,571 in 1994.
These increases were due to increases in revenues, upon which such fees and
allocations are based.
Depreciation and amortization expense decreased $5,740, or
approximately 2 percent, to $335,003 for the three months ended June 30, 1995
from $340,743 at June 30, 1994. For the six months ended June 30, 1995 and
1994, depreciation and amortization expense decreased $65,342, or approximately
9 percent, to $669,807 in 1995 from $735,149 in 1994. These decreases were due
to the maturation of the intangible asset base.
The Partnership's operating loss decreased $23,107 to $16,112 for the
three months ended June 30, 1995 from $39,219 at June 30,1994. Operating loss
decreased $42,661, or approximately 31 percent to $96,061 for the six months
ended June 30, 1995 from $138,722 at June 30, 1994. These decreases were the
result of the increases in revenue exceeding the increases in operating expense
and management fees and allocated overhead from the General Partner. Operating
income before depreciation and amortization increased $17,367, or approximately
6 percent, to $318,891 for the three months ended June 30, 1995 from $301,524
at June 30, 1994. This increase was a result of the increase in revenue
exceeding the increases in operating expenses and management fees and allocated
overhead from the General Partner. For the six months ended June 30, 1995 and
1994, operating income before depreciation and amortization decreased $22,681,
or approximately 4 percent, to $573,746 in 1995 from $596,427 in 1994. This
decrease was a result of the increases in operating expenses and management
fees and allocated overhead from the General Partner exceeding the increase in
revenue.
Interest expense increased $33,001, or 34 percent, to $130,933 for the
three months ended June 30, 1995 from $97,932 at June 30, 1994. For the six
months ended June 30, 1995 and 1994, interest expense increased $66,048, or
approximately 35 percent, to $253,512 from $187,464, respectively. These
increases were due primarily to higher effective rates on interest bearing
obligations. Loss before equity in net loss of cable television joint venture
decreased $19,481, or approximately 12 percent, to $148,439 for the three
months ended June 30, 1995 from $167,920 at June 30, 1994 . For the six months
ended June 30, 1994 and 1995, loss before equity in net loss of cable
television joint venture decreased $23,152, or approximately 6 percent, to
$349,778 at June 30, 1995 from $372,930 at June 30, 1994 . These decreases
were due primarily to the factors discussed above.
The Venture
In addition to its Orangeburg System, the Partnership owns an
approximate 40 percent interest in the Venture.
Revenues of the Venture increased $447,777, or approximately 8
percent, to $5,760,706 from $5,312,929 for the three months ended June 30, 1995
as compared to 1994. For the six month periods ended June 30, 1995 and 1994,
revenues increased $711,440, or approximately 7 percent, to $11,203,617 at June
30, 1995 from $10,492,177 at June 30, 1994. An increase in the number of basic
subscribers combined with basic service rate adjustments implemented in the
Venture's systems primarily accounted for the increase in revenues. The
increase in the number of basic subscribers accounted for approximately 39
percent and 54 percent of the increase in revenues for the three and six months
ended June 30, 1995 and the basic service rate adjustments accounted for
approximately 35 percent and 26 percent of the increase in revenues for the
similar periods. Since June 30, 1994, the Venture has added 2,910 basic
subscribers representing an increase of approximately 5 percent. Basic
subscribers increased to 63,804 at June 30, 1995 from 60,894 at June 30, 1994.
This increase in the subscriber base accounted for approximately 35 percent and
41 percent, respectively, of the three and six month increases in revenues.
Increases in advertising sales revenue accounted for approximately 12 percent
and 15 percent, respectively, of the three and six month increases in revenues.
No other single factor significantly affected the three and six month increases
in revenues.
Operating expenses consist primarily of costs associated with the
administration of the Venture's cable television systems. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and consumer marketing expenses.
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Operating expenses increased $50,651, or approximately 2 percent, to
$2,977,878 from $2,927,227 for the three months ended June 30, 1995 as compared
to 1994. For the six months ended June 30, 1995 and 1994, operating expenses
increased $326,760, or approximately 6 percent, to $6,259,890 at June 30, 1995
from $5,933,130 at June 30, 1994. Operating expenses represented 52 percent
and 56 percent, respectively, of revenue for the three and six month periods
ended June 30, 1995 compared to 55 percent and 57 percent, respectively, for
the similar periods in 1994. Increased programming costs primarily accounted
for the increases in operating expenses, which were partially offset by
decreases in personnel and plant related expenses for the three and six month
periods. No other individual factors were significant to the increases in
operating expenses.
Management fees and allocated overhead from the General Partner
increased $1,892, or less than one percent, to $670,333 from $668,441 for the
three months ended June 30, 1995 as compared to 1994. For the six months ended
June 30, 1995 and 1994, management fees and allocated overhead from the General
Partner increased $20,503, or approximately 2 percent, to $1,367,298 at June
30, 1995 from $1,346,795 at June 30, 1994. These increases are due to the
increases in revenues, upon which such fees and allocations are based, which
were partially offset by a decrease in allocated expenses from the General
Partner.
Depreciation and amortization expense increased $76,481, or
approximately 4 percent, to $2,221,415 for the three months ended June 30, 1995
from $2,144,934, as compared to 1994. For the six months ended June 30, 1995
and 1994, depreciation and amortization expense increased $124,449, or
approximately 3 percent, to $4,443,212 at June 30, 1995 from $4,318,763 at June
30, 1994. These increases were due to the increase in the Venture's
depreciable asset base.
Operating loss decreased $318,753, or approximately 75 percent, to
$108,920 from $427,673 for the three months ended June 30, 1995 as compared to
1994. Operating loss decreased $239,728, or approximately 22 percent, to
$866,783, from $1,106,511 for the six months ended June 30, 1995 as compared to
1994. These decreases are a result of the increase in revenues exceeding the
increases in operating expenses, management fees and allocated overhead from
the General Partner and amortization and depreciation expense. Operating
income before depreciation and amortization increased $395,234, or
approximately 23 percent, to $2,112,495 for the three months ended June 30,
1995 from $1,717,261 for the three months ended June 30, 1994. For the six
month periods, operating income before depreciation and amortization increased
$364,177, or approximately 11 percent, to $3,576,429 in 1995 from $3,212,252 in
1994. These increases are due to the increase in revenues exceeding the
increases in operating expense and management fees and allocated overhead from
the General Partner.
Interest expense increased $262,377, or approximately 41 percent, to
$906,623 from $644,246 for the three months ended June 30, 1995 as compared to
1994. For the six months ended June 30, 1995 and 1994, interest expense
increased $564,899, or approximately 47 percent, to $1,775,116 in 1995 from
$1,210,217 in 1994. Higher effective interest rates are responsible for the
increase in interest expense.
Net loss decreased $69,380, or approximately 10 percent for the three
month periods ended June 30, 1995 and 1994, to $595,393 in 1995 from $664,773
in 1994. This decrease was due to the factors discussed above. For the six
month periods ended June 30, 1995 and 1994, net loss increased $164,935, or
approximately 12 percent, to $1,578,024 in 1995 from $1,413,089 in 1994. This
increase was due to the factors discussed above and the losses are expected to
continue in the future.
11
12
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
12
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES CABLE INCOME FUND 1-B, LTD.
BY: JONES INTERCABLE, INC.
General Partner
By: /S/ Kevin P. Coyle
-------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: August 14, 1995
13
14
EXHIBIT INDEX
Exhibit No. Exhibit Description Page
----------- ------------------- ----
27 Financial Data Schedule