FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the year ended December 31, 2000
Commission file number: 333-62077

JONES MEDIA NETWORKS, LTD. (FORMERLY KNOWN
AS JONES INTERNATIONAL NETWORKS, LTD.)
------------------------------------------------------
(Exact name of registrant as specified in its charter)

COLORADO 84-1470911
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(State of Organization) (IRS Employer
Identification No.)

9697 E. MINERAL AVENUE, ENGLEWOOD, COLORADO 80112 (303) 792-3111
- ------------------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone no.
including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None*

Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (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. _____

*This Annual Report on Form 10-K is being filed pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended.

JONES MEDIA NETWORKS, LTD.

ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2000

TABLE OF CONTENTS

PAGE NO.
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PART I
ITEM 1. BUSINESS 1
Overview 1
Background 2
Principal Businesses 2
Network Radio 2
Cable Television Programming 7
Internet Advertising Sales Services 10
Satellite Services 10
Employees 11
Competition 11
Government Regulation 12
Risk Factors 13

ITEM 2. PROPERTIES 14

ITEM 3. LEGAL PROCEEDINGS 14

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND 15
RELATED STOCKHOLDER MATTERS

ITEM 6. SELECTED FINANCIAL DATA 15

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 40

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 41

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 74

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 74

ITEM 11. EXECUTIVE COMPENSATION 78

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT 84

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 88

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K 91

Certain information contained in this Form 10-K Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements, other than statements of
historical facts, included in this Form 10-K Report that address activities,
events or developments that Jones Media Networks, Ltd. expects, believes or
anticipates will or may occur in the future, including such matters as changes
in the industries in which we operate, our acquisition and marketing strategies,
capital expenditures, our operating strategies, the effects of competition, our
expansion plans and other such matters, are forward-looking statements. These
forward-looking statements are based upon certain assumptions and are subject to
a number of risks and uncertainties. Actual events or results may differ
materially from those discussed in the forward-looking statements as a result of
various factors.

iii

PART I

ITEM 1. BUSINESS

OVERVIEW

Our company is comprised of a leading network radio business and two cable
television networks. We syndicate radio programming and services to more than
5,350 radio stations throughout the United States and reach approximately 152
million listeners each week through our network radio business. Our cable
programming is distributed to approximately 2,600 cable television systems
throughout the United States and currently is available to over 47 million cable
households on a full- or part-time basis. In 2000, we began to offer Internet
advertising sales services. We also provide satellite services to facilitate the
distribution of our programming and that of other companies.

Our business includes the following:

- NETWORK RADIO

Our network radio business encompasses the programming and services we
provide to radio stations as well as services we provide to third party
producers. We syndicate to local radio stations approximately 1,800 hours
of original radio programming weekly. This programming is comprised of ten
24-hour formats and 21 syndicated programs. The syndicated programs range
in length from less than five minutes per day to as much as five hours per
day. Our radio programming covers a wide variety of genres, such as
country, adult contemporary, talk and classic rock. It features well-known
syndicated programs such as Delilah, Lia, Dallas Live From Nashville and
The Crook & Chase Country Countdown.

- CABLE TELEVISION NETWORKS

Our cable television networks consist of Great American Country (GAC),
a 24-hour country music video network, and Product Information Network
(PIN), which airs long-form paid programming produced by advertisers and
infomercial providers. At December 31, 2000, GAC reached approximately 12.8
million subscribers (based on subscriber counts provided by cable
operators). According to the December 2000 Sample Reports issued by Nielsen
Media Research, GAC reached approximately 15 million subscriber households.
PIN reaches approximately 35 million households on a full- or part- time
basis. We own all of GAC, and we own 55.3% of PIN through a joint venture
with Cox Communications, Inc.

- INTERNET ADVERTISING SALES SERVICES

In 2000, we began offering Internet advertising sales services, with
initial focus on streaming media advertising. Streaming media, commonly
called web casting, is programming transmitted over the Internet, instead
of traditional radio and television airwaves. Currently we represent
approximately 13 streaming media clients, most of which provide streaming
audio services on the Internet.

- SATELLITE SERVICES

We provide satellite delivery and earth station support services for
GAC, PIN and cable channels operated by other companies. We own two
satellite transponders and an uplink facility. Ownership of these assets
allows us to control the distribution of our radio and cable programming.
It also provides us with a cost-effective platform for launching new radio
and cable networks. We generate additional revenues from leasing excess
satellite capacity and providing related support services to other cable
programmers.

BACKGROUND

We are a Colorado corporation incorporated in 1998 and are the successor to
certain affiliated entities that previously conducted our businesses. In an
effort to better reflect our core business focus, we changed our name from Jones
International Networks, Ltd. to Jones Media Networks, Ltd., in December 2000.

We are a holding company. Our operations are conducted through a number of
subsidiaries, including Jones Radio Network, Jones Broadcast Programming (f/k/a
Broadcast Programming) and Jones MediaAmerica (f/k/a MediaAmerica) (all network
radio), Great American Country and Product Information Network Venture (cable
television programming), and Jones Earth Segment and Jones Space Holdings
(satellite services). Our principal shareholder is Jones International, Ltd.,
which owns a number of subsidiaries with which we have business dealings. Until
April 1999, Jones International owned a controlling interest in Jones
Intercable, a large multi-system cable television operator.

Our corporate offices are located at 9697 East Mineral Avenue, Englewood,
Colorado 80112. Our telephone number is (303) 792-3111.

PRINCIPAL BUSINESSES

NETWORK RADIO

We are the leading independent (non-broadcaster owned) provider of
high-quality radio programming to radio stations nationwide. We distribute radio
programming and

services to radio stations in exchange for advertising time (commercial
inventory) that we sell to national advertisers. This is known in the media
industry as "barter syndication." This allows us to provide radio stations with
a cost efficient alternative to the talent, time and production expense required
to develop in-house programming. We offer radio stations a wide selection of
24-hour satellite delivered formats, syndicated programming and services,
including programming consulting. Our high-quality, personality-driven
programming expands our affiliated stations' programming selections and enables
them to more effectively compete in their markets.

Our network radio operations feature over 100 on-air personalities, the
majority of whom have extensive top 25 market experience. We control the
production of our programming, which allows us to tailor our programs to respond
to current and changing listening preferences. Our high quality, distinctive
content is designed to enable radio stations to improve the quality of their
programming and to differentiate their on-air presentations from other stations
in their local markets. In many instances, this allows our affiliated stations
to realize higher ratings and advertising revenues with lower out-of-pocket
expenses.

To supplement our in-house programming capabilities, we have agreements
with third party programmers to license and distribute their distinctive,
high-quality content. An example of such third party content is "Music Of Your
Life," a 24-hour network targeted to a mature audience, hosted by Gary Owens,
Wink Martindale and other well-known personalities. Agreements with third party
programmers usually provide that the programmer creates and develops the radio
program at its cost. Our role is to:

- market the program to radio stations;
- manage the relationship with radio station affiliates;
- sell national advertising; and
- provide technical support and other ancillary services.

In return for providing the station with programming content, we receive
commercial inventory, which we then sell to national advertisers. The amount of
commercial inventory we receive is based on several factors, including the type
and length of the programming and the size of the radio station affiliate. In
some instances, we may also receive a monthly license fee in addition to or in
lieu of the commercial inventory.

We believe we are the largest independent network radio sales organization
in the country. Through this organization, we are able to aggregate audiences
based on the radio stations receiving our programming, creating a sufficiently
large audience of listeners to attract national advertisers. The commercial
inventory is then sold to advertisers, who seek to reach their target audiences
in a cost-efficient and effective manner.

In addition, we provide advertising sales services to third party
producers, who pay us a commission for the sale of the commercial inventory and
related services, such as inventory management, commercial scheduling, billing,
collections and proof-of-performance collection. By consolidating the commercial
inventory of our owned programming with the commercial inventory of third
parties, we have the ability to create advertising packages reaching a national
audience. This enables us to attract major network radio advertisers while
providing a valuable service to third party producers.

Our 16 radio advertising account executives and sales managers are located
in six major advertising markets in the United States (New York, Los Angeles,
Chicago, Dallas, Detroit and Nashville). These account executives market the
commercial inventory of our owned programs and our third party producers via
personal selling to national advertisers and their advertising agencies. The
sales team has an average of 18 years experience in the advertising and sales
management arena. Additionally, we are continuing to develop numerous
cross-selling opportunities and other synergies that arise from the
complementary nature of our services and customer base of national advertisers.

We have developed a state of the art, proprietary software system that
handles the sales proposal, commercial inventory management and order processing
for our advertising sales. In addition, our research department continuously
analyzes a variety of data to provide our salespeople with accurate estimates of
listening audiences, creative means to demonstrate the particular advantages of
the programs we sell, and network radio's advantages versus other media forms.
We utilize audience listening data from Arbitron, an independent rating service,
to develop our audience and demographic reports for all of our programs.

We market our radio programming directly to radio stations through our
32-person affiliate sales group. Our affiliate sales group uses industry market
research and databases to identify prospective radio station affiliates. Using
this data, our salespeople develop relationships with radio station affiliates
in order to serve discrete station programming needs. In addition, our marketing
team assists in the sales effort with marketing campaigns, direct mail, trade
advertising and sales materials. Our presence at industry conventions and trade
shows also allows us to increase awareness of our radio programming and secure
new radio station affiliates.

We have affiliate agreements with approximately 3,200 radio stations
throughout the United States. Our programming is generally sold on an exclusive
basis to stations in their city of license. However, we are able to place
different programs within the same market.

Our network radio programs and services consist of

- 24-hour formats,
- long-form syndicated programs,
- short-form syndicated programs,

- programming and consulting services and
- advertising sales and other services.

24-HOUR FORMATS. We deliver ten 24-hour music programs that cover many of
the major music formats used by radio stations nationwide. We have radio station
affiliates in all 50 states and in the 50 largest markets. Our network is
designed to provide complete content for our affiliated radio stations,
replacing their in-house on-air talent and significantly reducing their
production costs. Our "round- the-clock" satellite-delivered programming is
aired live and hosted by professional radio announcers. Examples of this type of
programming include the country, adult contemporary, adult standards, classic
rock and oldies formats. In order to present a localized image, our on-air
talent records unique liners and positioning statements for each affiliate,
which are delivered via satellite for insertion at the local station. In
addition, our programming provides stations with breaks to insert locally sold
commercials, news, weather or traffic.

As compensation for providing 24-hour programming content and services, we
receive one or two minutes per hour of commercial inventory airtime. In
situations in which we receive two minutes per hour of inventory, we may also
receive a monthly license fee from stations providing a lower level of audience,
as measured by average quarter hour audience ("AQH"). The typical term of these
license agreements is one to three years. Historically, contract renewals
average between 80% and 85%.

During 2001, we anticipate launching several new 24-hour formats that will
target the urban/African American market. These are being developed in
conjunction with Henry/Kelly Programming Service, Inc. The first of these was
launched in February 2001.

LONG-FORM SYNDICATED PROGRAMMING. Long-form syndicated programming is
designed to fill, on a daily or weekly basis, a one- to six-hour time period,
such as

- 6 am to 10 am,
- 10 am to noon,
- 4 pm to 5 pm,
- 7 pm to midnight and
- midnight to 6 am.

These programs include shows hosted by nationally known personalities,
interview shows featuring popular music talent and music countdown shows. We
will continue to develop and acquire new syndicated programming in order to
increase our talent pool and audience size and to respond to the needs of our
affiliate stations. In July 1998, we launched "Dallas Live From Nashville," a
long-form country show produced in Nashville and distributed to over 100 radio
stations via satellite. In June 2000, we launched the "Weissbach the Quest," and
in February 2001, we launched "Body & Soul." We have also added two high-growth
syndicated shows, "Delilah" and

"Lia," through our acquisition of Broadcast Programming in August 1999. We also
have web sites for certain of these programs, such as

- radiodelilah.com,
- radiolia.com and
- dallaslivefromnashville.com.

We target and distribute our long-form programming to larger market radio
stations. These shows, because they are personality-driven, tend to garner high
ratings in the markets where they are carried. In return for providing this
programming, we receive up to six minutes per hour of commercial inventory from
our radio station affiliates for each hour of programming. The typical affiliate
agreement for long-form programming is one year.

Our long form radio programming includes

- Delilah,
- Lia,
- Your Weekend with Jim Brickman,
- Dallas Live From Nashville,
- Weissbach the Quest,
- The McLaughlin Radio Hour,
- Body & Soul and
- The Crook & Chase Country CountDown.

SHORT-FORM SYNDICATED PROGRAMMING. Our short-form programs, which are
generally less than five minutes in duration, consist largely of 60 to 90 second
entertainment news reports that can be interactive with the programming of
affiliated radio stations. The typical affiliate agreement for short-form
programming is approximately one year. We receive one to two minutes of
commercial inventory in return for such programming.

Our short-form radio programming includes

- FightBack! With David Horowitz,
- Oldies Calendar With CharlieTuna and
- Moneyhunt.

SERVICES. We also provide radio stations services such as news, information
on current events and comedy services designed to assist on-air talent in
preparation for these shows. Examples include

- American Comedy Network,
- Associated Press News and
- Launch Radio.

CONSULTING. We also provide music programming and consulting services to
radio stations, including

- full-service programming consulting,
- music libraries and new music updates,
- song-by-song music scheduling,
- announcer voice-tracks for automated stations,
- automation system integration and support and
- advice, information and training.

ADVERTISING SALES AND OTHER SERVICES. We also provide advertising sales,
affiliate sales and other services to third party producers and others,
including

- Cox Radio,
- Motor Racing Network (NASCAR),
- CNN Radio Noticias,
- VNU's Broadcast Data Systems and
- Sirius Satellite Radio.

CABLE TELEVISION PROGRAMMING

We provide cable television programming through two networks:

- Great American Country; and
- Product Information Network.

GREAT AMERICAN COUNTRY. GAC is a 24-hour country music video network which
was launched on December 31, 1995. GAC features a mix of current top country
hits and past country hits that capitalize on the popularity of country music.
GAC is programmed to appeal to the largest, most affluent market segment of the
country music audience-the 25 to 54 age group. GAC acquires its music videos at
no cost from record companies, which use this method to promote their performing
artists. GAC also produces and airs long form shows, including "Fast Forward,"
"The Top 15 Country Countdown," "Behind the Scenes" and "Country Request Live."
In addition, GAC also has a companion web site, COUNTRYSTARS.COM. We believe
that the programming quality of GAC has significantly benefited from our
experience in the country music radio programming business.

GAC derives its revenues from license fees and national advertising. The
typical length of GAC's affiliate agreements is ten years. The monthly license
fee rate card for GAC during 2000 was $.06 per subscriber. GAC's affiliate
agreements typically provide for annual escalators of $.005 per month per
subscriber. As an incentive to attract new affiliates, such license fees are
waived for a period of time after initial launch and are also subject to volume
discounts. Both the waiver periods and volume discounts for

license fees are based on the number of subscribers receiving GAC, the
subscriber commitment made by the multiple system operator ("MSO"), or the total
potential subscriber base of the MSO. As an additional incentive for MSOs to
provide GAC with subscriber distribution, GAC also offers MSOs an attractive,
one-time cable programming distribution payment, which is typically based on the
number of subscribers receiving the GAC service. This license fee and cable
programming distribution payment strategy has allowed us to supplant our
competitors' programming with GAC in top country markets, including Dallas,
Atlanta, Reno, Sacramento, Cincinnati, Detroit, Knoxville, Milwaukee, Salt Lake
City, Tallahassee, Corpus Christi and Charleston.

GAC currently generates over $600,000 per month in advertising revenue.
GAC's advertising sales are impacted by a variety of factors, including the
level of distribution, ratings, prevailing advertising market rates, sellout
rates and number of advertising minutes available for national advertising. In
January 2000, GAC became a Nielsen rated network, enabling the network to
attract significantly more national advertisers. Nielsen ratings allow GAC to
better identify its viewership at specific time periods of the day, which in
turn enhances our ability to sell national spot advertising. We believe that as
GAC continues to increase its subscriber level, we will be able to target an
even broader group of advertisers and derive higher advertising revenues based
on traditional spot advertising, and continue to lessen our reliance on direct
response advertising.

At December 31, 2000, GAC reached approximately 12.8 million subscribers
(based on subscriber counts provided by cable operators). According to the
December 2000 Sample Reports issued by Nielsen Media Research, GAC reached
approximately 15 million subscriber households. GAC's subscriber distribution is
provided under affiliate agreements that allow GAC to seek carriage on the cable
systems of the MSOs covered under such agreements. GAC has affiliate agreements
with five of the ten largest MSOs, including

- Adelphia Communications Corporation,
- AT&T Broadband,
- Comcast Corporation,
- Cox Communications, Inc. and
- AOL Time Warner Inc.

GAC also has an affiliate agreement with the National Cable Television
Cooperative, Inc., a cable programming cooperative.

In November 2000, as part of our efforts to increase GAC subscriber
distribution, GAC entered into a digital satellite distribution agreement with
AT&T's Headend in the Sky, Inc. ("HITS"), which enabled GAC to begin
broadcasting its programming on the

HITS digital platform to cable television systems who elect to carry GAC on
their digital programming tiers.

PRODUCT INFORMATION NETWORK. PIN is a satellite-delivered long-form
advertising service owned by the PIN Venture, a joint venture with Cox
Communications, Inc. PIN was launched in February 1995 and is distributed on its
own dedicated channel 24-hours a day, seven days per week. We are the manager of
the PIN Venture and are responsible for its day-to-day operations.

PIN generates its revenues through the sale of long-form paid advertising
known as infomercials. An infomercial is an advertisement paid for by the
advertiser based on the time of day when the infomercial is aired. Infomercials
are usually one-half hour in length and are often produced in an entertainment
format. PIN's programming is produced and provided by its advertisers at no cost
to PIN. The majority of current programming consists of traditional infomercials
from infomercial producers, such as

- Guthy Renker Corporation,
- Ronco, Inc.,
- Time-Life,
- Thane International, Inc. and
- ATI, Inc.

PIN compensates cable system operators for carriage through a rebate
program. Such payments, which are generally in the form of annual rebates per
subscriber, averaged approximately 76% of PIN's net advertising revenues in
2000. For 2000, we paid full-time affiliates an average of $1.44 per full-time
revenue equivalent subscriber ("FTREs").

PIN is distributed to subscribers through 527 cable systems and broadcast
affiliates and is carried on a portion of the cable systems of eight of the ten
largest MSOs, including

- Adelphia Communications Corporation,
- AT&T Broadband,
- Cablevision Systems Corporation,
- Charter Communications Inc.,
- Comcast Corporation,
- Cox Communications Inc.,
- Cable One, Inc. and
- AOL Time Warner Inc.

PIN's standard affiliation agreement generally requires a one-year
commitment of carriage. However, the agreements with Comcast Corporation, Cox
Communications Inc. and Adelphia Communications Corp. are long-term agreements,
each with more than five years remaining. As of December 31, 2000, PIN was

distributed on a full- or part-time basis to cable television systems and
broadcast television stations representing approximately 35 million households.

INTERNET ADVERTISING SALES SERVICES

In 2000, we began offering Internet advertising sales services, with
initial focus on streaming media advertising. Streaming media, commonly called
web casting, is programming transmitted over the Internet, instead of
traditional radio and television airwaves. Currently we represent approximately
13 streaming media clients, most of which provide streaming audio services on
the Internet.

SATELLITE SERVICES

We support our distribution of programming with satellite services. We
transmit our radio and cable television programming directly to radio stations,
cable system operators and other video distributors via satellite transponders
that we either own or lease. We provide playback services, trafficking and
ground-to-satellite transmission of our programming services from our uplink
facility in Englewood, Colorado. Through digital compression of one of our
transponders, we have created additional channel capacity to use either for our
own programming or to lease to other parties.

We own two satellite transponders on strategically positioned GE Americom
satellites, Satcom C-3 and Satcom C-4. Through these transponders, we deliver a
variety of popular cable television programming. We use digital technology in
providing uplink, playback and trafficking services. On Satcom C-3, GAC, PIN and
one related party currently lease three of seven available channels. The lease
term of the related party agreement is for approximately the remaining life of
the satellite. We have also historically entered into relatively short-term
satellite capacity and earth station services agreements with third parties,
with the most recent being with NBC for broadcast of the 2000 Summer Olympic
Games. At minimal incremental cost, we could further digitally compress the
transponder to add at least three additional channels if demand warranted. In
December 2000, we negotiated with an affiliated company a one-time payoff amount
for early termination of certain of its earth station services and satellite
transponder services commitments.

We have leased the C-4 transponder to an unrelated party. This lease
terminates on December 31, 2002, with an option, exercisable by the lessee, to
extend through October 16, 2004. The lease provides for monthly payments
averaging $160,000. We continue to market our additional compressible capacity
on our Satcom C-3 transponder and related services.

We expect that our satellite transponders will be available to allow
distribution of our television programming until early 2005, at which time we
will be required to migrate our programming over to new satellite transponder
space.

EMPLOYEES

We refer to our employees as associates. As of December 31, 2000 we had 305
full-time and 66 part-time associates. In addition, we maintain relationships
with independent writers, program hosts, technical personnel and producers. None
of the associates is covered by a collective bargaining agreement and we believe
our employee relations to be good.

COMPETITION

NETWORK RADIO. Our network radio business competes for national advertising
revenues, radio station affiliates, on-air talent and third party producers
with major network radio companies, as well as with a number of smaller
independent producers and distributors. The dominant competitors in the industry
are affiliated with major radio station owners, have recognized brand names and
control large networks that include affiliates to which the competitors may be
required to pay to broadcast the network's commercials.

Over the last three years, several network radio companies have merged and
many independent program providers have been acquired by these companies. These
companies have large amounts of commercial inventory to sell, possess
significant resources and have access to commercial time on their owned and
operated stations.

Our largest competitors include

- ABC Radio Networks,
- Clear Channel-owned Premiere Radio Networks and
- Westwood One/CBS Radio Networks.

We also compete for advertising dollars with other media such as broadcast
and cable television, print, outdoor and Internet. The primary factors in
competing for network radio advertising dollars are high quality programs with a
national audience and experienced advertising sales personnel who have strong
relationships with advertising agencies and national advertisers.

A recent technological innovation, satellite radio, permits licensees to
broadcast digital quality radio programming nationwide via satellite. In
February 1997, the FCC auctioned two satellite radio licenses. These licenses
were awarded to Sirius Satellite Radio (formerly CD Radio) and XM Satellite
Radio. Additionally, recent technological advancements have improved the quality
and availability of Internet radio, which includes the technology of wireless
Internet radio for automobiles. We cannot predict what effect digital satellite
radio or Internet radio will have on the radio industry or on us.

CABLE TELEVISION NETWORKS. Our cable television networks compete for
distribution, viewers and advertising revenues with hundreds of cable and
broadcast

television networks supplying a variety of entertainment and infomercial
programming. GAC's principal direct competitor is Country Music Television, an
advertiser-supported basic cable network owned by Viacom, Inc. that delivers
country music videos on a 24-hour basis. GAC also competes against other similar
music video networks, including MTV and VH1, which are also owned by Viacom,
Inc. PIN competes directly with at least two other infomercial networks, Access
Television Network and GRTV, both of which have significant distribution
capabilities. PIN also competes with numerous other cable television networks
that air infomercial and/or home shopping programming, many of which have a
substantial number of subscribers.

With advances in technology, we expect to encounter additional competition
for viewers as technological advances, such as the deployment of fiber optic
cable, digital compression technology and the multiplexing of cable services are
examples of new technologies that allow cable systems to expand their channel
capacity and enhance their ability to add networks.

INTERNET ADVERTISING SALES SERVICES. This is a new business and we believe
that only one significant competitor exists, Cybereps, an Interep company.

SATELLITE SERVICES. We compete in the delivery of domestic satellite
services with satellite owners and resellers, satellite service providers,
microwave carriers and full-service teleports. Our principal competitors have
substantially greater resources, including Vyvx Teleport, AT&T National Digital
Television Center, GE Americom and Panamsat Corp. We believe that transmission
quality, reliability, price and the location of uplink facilities are the key
competitive factors in this market.

OTHER FACTORS. As there are generally few legal barriers or proprietary
rights to prevent entry into our markets, we could face future competition from
new competitors offering services similar to ours. Many of our competitors have
greater resources and there can be no assurance that we will be able to compete
successfully in the future. Also, technology changes, such as Internet and
satellite delivered radio and television, could cause the entry of new
competitors. With the advent of new technologies, local radio stations can
pre-record their local announcers and automate their operations. This allows for
cost reductions and greater operating efficiency, and provides radio stations
with an alternative to network radio programming.

GOVERNMENT REGULATION

Although our radio and television networks are not generally directly
regulated by the FCC, the radio stations and cable television systems to which
we sell our programming are regulated. As a result, the federal laws and FCC
regulations that affect these entities indirectly affect us.

Among other things, the FCC adopts and implements regulations and policies
that directly or indirectly affect the ownership, operation and sale of radio
and television

stations. The FCC also has the power to impose penalties for violations of its
rules or federal statutes. Such regulation may adversely affect us.

The cable television industry is subject to extensive federal, state and
local regulation. Regulation can take the form of price controls, programming
carriage requirements and programming content restrictions. Such regulation
could affect the availability of time on local cable television systems for sale
by us, as well as the price at which such time is available. Both GAC and PIN
are subject to the FCC's rules requiring closed captioning for the hearing
impaired on all programming, which began in the first quarter of 2000. We expect
that compliance with these rules will not have an adverse effect on our
financial condition. We cannot assure you that material, adverse changes in
regulations affecting us, or the cable television industry in general, will not
occur in the future.

Our satellite delivery and production support services are directly
regulated by the FCC. We hold FCC microwave and earth station uplink licenses
that we utilize to provide delivery and support services. Because these licenses
relate primarily to the technical operation of our microwave and uplink
facilities, which are used for internal purposes and program delivery, there are
only limited regulatory burdens associated with keeping these licenses in good
standing.

RISK FACTORS

Our business involves certain risks, related to, among other factors: (i)
our history of net losses, (ii) our limited cash position, (iii) our outstanding
debt and the restrictions imposed by the Indenture pursuant to which the debt
was issued, (iv) our dependence upon earnings and cash flow of our subsidiaries,
(v) distribution of our radio and television programming, (vi) dependence on
advertising relationships and revenues, (vii) overall market conditions in all
of our businesses, (viii) business expansion issues, (ix) our stock ownership
structure, (x) the fact that we engage in and expect to continue to engage in
certain transactions with our affiliates, (xi) intense competition from various
sources which affect all aspects of our business and (xii) other information
about us set forth in this Form 10-K Report and our other filings with the
Securities and Exchange Commission.

ITEM 2. PROPERTIES

Our principal executive offices are located in Englewood, Colorado. We
sublease office space from affiliates of Jones International, as well as office
space and studio space from third parties. See "Certain Relationships and
Related Transactions." We lease office space in the following cities: Englewood,
CO, New York, NY, Seattle, WA, Milford, CT, Nashville, TN, Chicago, IL, Dallas,
TX, Detroit, MI, Washington, D.C., Los Angeles, CA and San Francisco, CA. In
addition, we own 8.4 acres of land in Englewood, Colorado. We believe our office
space, studio space and Earth Segment's satellite uplink facility are adequate
to meet our current needs.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are involved in routine legal proceedings incident to
the ordinary course of our business. We believe that the outcome of all such
routine legal proceedings in the aggregate will not have a material adverse
effect on our financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On December 21, 2000, we held a Special Meeting of Shareholders. The
shareholders approved a proposal that our Articles of Incorporation be amended
to change our name to "Jones Media Networks, Ltd." The vote on this amendment to
our Articles of Incorporation was as follows, with each share of Class A Common
Stock and Series A Convertible Preferred Stock being entitled to one vote, and
each share of Class B Common Stock being entitled to ten votes:

CLASS OF SHARES VOTING APPROVING DISAPPROVING ABSTAINING
- --------------------- --------- ------------ ----------

Class A Common Stock 4,894,210 0 0
Series A Convertible Preferred 1,918,000 0 0
Class B Common Stock 21,314,000 0 0

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

Not applicable.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following tables summarize certain financial and operating data for our
business. This information should be read along with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and our
consolidated financial statements and notes to those statements included
elsewhere in this document. The historical statements of operations and balance
sheet data as of and for each of the years in the five-year period ended
December 31, 2000 have been derived from our consolidated financial data, which
has been audited by Arthur Andersen LLP, independent auditors.

Year Ended December 31,
---------------------------------------------------------------------------
1996 1997 1998 1999 2000
----------- ----------- ----------- ----------- -----------
(in thousands except share, per share, weekly radio listener gross
impressions and unique station affiliates data)

STATEMENT OF OPERATIONS:
Revenues ............................................ $ 16,654 $ 29,112 $ 38,212 $ 64,366 $ 85,841
Operating expenses:
Operating ...................................... 8,914 17,049 27,181 43,165 54,403
Selling and marketing .......................... 1,807 3,491 5,412 6,438 10,231
General and administrative - Corporate ......... 581 1,151 1,116 1,943 2,503
Depreciation and amortization .................. 4,476 5,168 6,266 10,775 14,346
----------- ----------- ----------- ----------- -----------
Total operating expenses ................ 15,778 26,859 39,975 62,321 81,483
----------- ----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) ............................. 876 2,253 (1,763) 2,045 4,358
----------- ----------- ----------- ----------- -----------
Interest expense, net ............................... 4,428 5,569 8,195 11,729 11,491
Other expense ....................................... (841) 616 1,228 (32) 583
Income tax provision (benefit) ...................... (387) (1,342) 49 (470) 124
Minority interest ................................... (9) 903 215 881 1,075
----------- ----------- ----------- ----------- -----------
NET LOSS ............................................ $ (2,315) $ (3,493) $ (11,450) $ (10,063) $ (8,915)
=========== =========== =========== =========== ===========
Net loss per common share:
Basic ......................................... $ (0.45) $ (0.64) $ (1.71) $ (1.32) $ (1.16)
Fully diluted ................................. $ (0.45) $ (0.64) $ (1.71) $ (1.32) $ (1.17)
Weighted average shares outstanding:
Basic ......................................... 5,129,466 5,500,560 6,715,805 7,617,926 7,665,843
Fully diluted ................................. 5,129,466 5,500,560 6,702,010 7,601,868 7,613,955
OTHER DATA:
EBITDA (a) .................................... $ 5,352 $ 6,599 $ 4,290 $ 11,960 $ 17,643
Capital expenditures .......................... 2,969 1,367 2,258 850 3,455
Cable programming distribution payments (b) ... -- -- 3,064 6,354 3,282
Net cash provided by (used in):
Operating activities ........................ 4,776 7,589 (7,065) 2,398 7,793
Investing activities ........................ (3,971) (1,156) (35,020) (32,633) (4,337)
Financing activities ........................ (807) (2,720) 59,023 22,851 (1,826)
AUDIENCE DATA (at end of period):
Weekly radio listener gross impressions
(in millions)(c) ............................ 461 494 1,505 1,294 1,443
Unique radio station affiliates (d) ........... 1,273 1,484 4,627 4,928 5,350
Great American Country subscribers (e) ........ 1,049 1,550 7,131 11,971 12,799
Great American Country households
according to Nielsen (f) .................... N/A N/A N/A N/A 15,027
Product Information Network subscribers(e) .... 8,111 11,497 20,634 30,094 34,968
Product Information Network FTRE's (g) ........ 4,803 7,036 10,026 13,054 14,649
BALANCE SHEET DATA (at end of period):
Cash, cash equivalents and available for
sale securities (h) ......................... $ 4 $ 3,717 $ 13,423 $ 20,159 $ 18,612
Working capital (deficiency) .................. (6,615) (9,331) 16,047 13,246 12,305
Total assets .................................. 38,298 41,358 110,894 128,462 121,540
Total long-term debt (i) ...................... 53,277 45,312 100,000 100,000 100,000
Shareholders' equity (deficit) ................ (23,269) (18,206) (11,333) 2,702 (5,324)

- -------------------

(a) EBITDA is unaudited and represents operating income (loss) plus
depreciation and amortization minus the EBITDA attributable to the minority
interest in the PIN Venture, a consolidated 55.3%-owned subsidiary.
Management acknowledges that EBITDA is not a measure of performance or
liquidity calculated in accordance with generally accepted accounting
principles. However, EBITDA is a measure widely used by analysts and
investors in the media industry to determine a company's operating
performance and ability to service and incur debt. EBITDA should not be
considered in isolation or as a substitute for net income (loss), cash
flows from operating activities or other consolidated income or cash flow
statement data prepared in accordance with generally accepted accounting
principles or as a measure of profitability or liquidity.

(c) Weekly radio listener gross impressions represents the total number of
times consumers are exposed to our radio commercials on average during a
week. This measurement is calculated by multiplying the average quarter
hour audience (AQH) for each of our network radio programs or services
times the number of 30-second equivalent commercial units we have available
to sell each week in each respective product, and summing such results to
arrive at a total weekly listener impression number. Because the weekly
listener gross impression calculation does not differentiate between a
one-time listener or a repeat listener who hears our broadcasted
commercials, the measurement includes multiple commercial impressions
recorded for the same listener. AQH represents the average number of people
aged 12 + estimated to have listened, for a minimum of five minutes during
any quarter hour, to a radio station broadcasting our advertising during
the time which we estimate our commercials are broadcast. These AQH
estimates are derived from data provided by Act I Systems (a third party
processor) that is based on Arbitron copyrighted and proprietary audience
estimates, and are not estimates produced by Arbitron. Weekly radio
listener gross impressions reflect the effect of the asset acquisitions of
the assets of MediaAmerica in July 1998 and Broadcast Programming in August
1999 for these respective years.

(d) Represents the number of non-duplicated radio station affiliates
broadcasting our commercial inventory in exchange for our network radio
products or services at the end of the periods indicated. Unique radio
station affiliates reflect the effect of the asset acquisitions of
MediaAmerica in July 1998 and Broadcast Programming in August 1999.

(e) Represents the total number of subscribers at the end of the periods
indicated based on subscriber counts provided by distributors of the
networks, including cable, other broadcast and multi-channel programming
providers.

(f) Represents the total number of Great American Country households at the end
of the periods indicated according to sample reports issued by Nielsen
Media Research. As Great American Country did not become a Nielsen-rated
network until January 2000, Nielsen household measurement data is not
available for prior periods.

(g) FTREs represent the number of full-time revenue equivalent subscribers
receiving PIN at the end of the periods indicated. FTRE weights part-time
subscribers based on the number of hours carried, the daypart carried based
on standard eastern time and the revenue associated therewith. Beginning in
1998, we have restated FTREs to reflect daypart carried based on Eastern
Standard Time instead of local time.

FTREs based on Eastern Standard Time more accurately reflect subscriber
information to our advertisers. FTREs information based on Eastern Standard
Time is not available for 1996 and 1997. Accordingly, FTREs reported for
1996 and 1997 are based on local time. We do not believe the difference in
FTREs reported based on Eastern Standard time and FTREs based on local time
is significant.

(h) Excludes restricted cash of $10 million at December 31, 1998.

(i) Includes current and non-current maturities of long-term debt and capital
lease obligations.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SHOULD BE READ IN CONJUNCTION WITH OUR HISTORICAL CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS DOCUMENT. THIS DOCUMENT
CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN ANY
FORWARD-LOOKING STATEMENT.

OVERVIEW

We own and operate a network radio business and two cable television
networks. We create, develop, acquire, produce and license programming that we
distribute to radio stations, cable television system operators and other video
distributors. Through our radio and cable television networks, we aggregate and
target a nationwide audience, thereby providing national advertisers with an
efficient and effective means to reach their desired demographic groups. We also
provide satellite services to facilitate the distribution of our programming and
that of other companies. In 2000, we began to offer Internet advertising sales
services.

The presentation of reportable segments has been changed from that
presented in the prior periods to combine the results of operations from
Internet websites related to our radio programming with the network radio
segment and the results of operations from Internet websites related to one of
our cable television networks with the cable television programming segment.
Because of the complementary nature of the Company's Internet websites to their
respective radio program and cable television network counterparts, we have
decided to include the results of operations of these companion websites in our
respective network radio and cable television programming operations. In
addition, we have combined the presentation of our radio programming content and
radio advertising sales services segments into the network radio segment.
Management believes that this presentation provides a more meaningful analysis
of our business segments.

The comparison of our results of operations from period to period is
affected by the purchase of the assets of MediaAmerica on July 10, 1998 and the
purchase of the assets of Broadcast Programming on August 2, 1999.

NETWORK RADIO

Our network radio revenues consist primarily of advertising revenues, fees
for programming and services we provide to radio stations and to third party
producers, e-commerce and other revenues generated by companion websites of
certain radio programs. We provide radio programming and services to radio
stations in exchange for commercial inventory that we resell to national
advertisers who advertise their products or services on our radio networks. We
recognize revenues upon airing of the advertisements. In addition, we generate
revenues by charging fees to third parties for certain advertising sales and
affiliates sales services, which are based on a percentage of related
advertising revenue. By combining our commercial inventory with that of our
third party producers, we can create customized advertising networks that allow
advertisers to reach their target markets.

Network radio expenses consist of program licensing, program development
and production costs, costs associated with selling of advertising time,
distribution and delivery costs and other costs, including the costs of
researching, designing, producing and licensing programs and maintaining related
websites for our radio

network. Radio distribution and delivery costs include satellite transponder
expenses, uplinking charges and associated costs.

CABLE TELEVISION PROGRAMMING

We provide cable television programming to cable television system
operators and other video distributors, sell advertising time on our two cable
networks and receive license fees for our country music television network. We
recognize advertising revenues upon airing of the advertisements. Any amounts
received from customers for advertisements that have not been aired during the
period are recorded as unearned revenues until such time as the advertisements
are aired.

GREAT AMERICAN COUNTY. GAC's revenues consist of advertising revenues,
subscriber license fees paid by cable operators who receive the network, and to
a much lesser extent, e-commerce revenues, advertising and other revenues
generated by its companion website. GAC generates advertising revenues by
selling airtime to advertisers. GAC's advertising revenues consist of both
direct response and national spot advertising. Direct response advertising is
airtime sold to agencies or national advertisers who have developed commercials
designed to motivate viewers to call an 800 phone number to purchase their
product or service. Payment for such advertising is typically guaranteed,
regardless of viewer response. Direct response advertising usually earns lower
rates than traditional national spot advertising.

Traditional national spot advertising is typically sold by cable television
networks that can demonstrate through ratings an ability to deliver the type and
quantity of viewers that national advertisers seek to target with their
advertising. Beginning in January 2000, GAC became a Nielsen-rated network,
enabling the network to attract significantly more national advertisers.
Advertising revenues are impacted by a variety of factors, including the level
of distribution (number of subscribers), ratings, audience composition
(demographics), advertising market and general economic conditions, and the
amount of advertising inventory allocated for national advertising.

License fee revenues are earned monthly based on a per subscriber rate set
pursuant to the cable operator's agreement with GAC and the number of
subscribers that are receiving GAC during the month. Depending on the level of
distribution provided by the cable operator, license fee discounts and abatement
periods may apply.

Historically, we have typically entered into 5 to 10 year contracts with
affiliates providing for carriage of GAC. In order to increase the distribution
of GAC, we offer affiliates a launch incentive payment, which is generally based
on the number of subscribers receiving the GAC service. These payments are
capitalized and amortized over the period during which a portion of such
payments is refundable.

Because most of the programming on GAC is provided to us without cost,
cable television programming expenses for GAC consist primarily of program
distribution and delivery costs, such as satellite transponder expenses,
uplinking charges and associated costs, original programming costs, advertising
sales services and administrative costs, as well as website enhancement and
maintenance costs.

PRODUCT INFORMATION NETWORK. We launched PIN in February 1995 as a joint
venture with Cox Communications, Inc. and, later, with Adelphia Communications
Corp. We now own approximately 55.3% of PIN. Effective April 1, 1997, we
consolidated the results of operations of PIN for financial reporting purposes.
Cox and Adelphia have agreed to carry PIN for 10 years.

PIN generates revenues through the sale of long-form paid advertising known
as infomercials. An infomercial is an advertisement that is paid for by the
advertiser on the basis of the time of day it is aired and the number of homes
reached at that time of day. Infomercials are approximately one half-hour in
length and are often produced in an entertainment format with high production
quality. Long-form advertising rates are affected by numerous factors, including
the level of subscriber distribution, audience composition, the life cycle of
existing infomercials, the availability of new and successful infomercials, the
number of infomercial suppliers, and infomercial advertising market and general
economic conditions.

PIN compensates cable system operators for carriage of PIN through a rebate
program. Such payments, which are generally in the form of annual rebates per
subscriber at a fixed rate per subscriber, averaged approximately 76% of PIN's
net advertising revenues in 2000.

INTERNET ADVERTISING SALES SERVICES

In 2000, we began offering Internet advertising sales services with initial
focus on streaming media advertising. Streaming media, commonly called web
casting, is programming transmitted over the Internet, instead of traditional
radio and television airwaves. Starting in the first quarter of 2000, we
incurred significant operating expenses to build a sales and technology
infrastructure in order to develop our Internet advertising sales business. We
hired associates to sell and market Internet advertising and to develop a
network of third party web site publishers and other clients. The success of our
Internet advertising sales services efforts is highly dependent upon our ability
to reach a sufficient audience and to aggregate, target and accurately measure
such audience in a way that is attractive to national advertisers. The
technology necessary to aggregate, target and measure such audiences is still
emerging and subject to rapid change. In addition, there is significant
uncertainty whether this new advertising medium will become widely-accepted by
advertisers. In the event we are unable to access the technology needed to
aggregate, target and measure these audiences and attract sufficient advertisers
to this new medium, our Internet advertising sales services business would be
materially and adversely affected. There can be no assurance that we will be
successful in our Internet advertising sales services efforts.

SATELLITE SERVICES

We generate revenues by providing satellite delivery and production support
services, including uplinking, trafficking and playback to related parties,
third parties and for our own programming operations. We recognize satellite
delivery and production support revenues upon the completion of the services or
as provided by contract.

Satellite delivery and production support expenses include uplinking
charges and other associated operating costs. These costs are relatively fixed
in nature, which gives us a high degree of operating leverage.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses are incurred to retain and increase the
number of radio station and cable system affiliates and advertising sales
clients. These expenses include salaries and commissions, travel and associated
expenses related to our sales and marketing activities, in addition to costs of
the design, production and distribution of marketing, advertising and
promotional materials for all segments. We anticipate increases in selling and
marketing expenses and associated costs as we continue to expand the
distribution of our network radio programs and services, cable television
programming, and increase the number of advertising sales clients. We intend to
use our radio and cable television content, commercial inventory and on-air
promotions to

drive targeted audiences to our companion websites. We also anticipate purchases
of third party advertising to promote our network radio and cable television
programming.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses include personnel and associated costs
for corporate management staff and support personnel including the accounting,
financial reporting and corporate Internet administration and technology
functions. As we continue to grow, we anticipate that our general and
administrative expenses will rise gradually.

DEPRECIATION AND AMORTIZATION

As the result of the acquisitions of the assets of Broadcast Programming
and MediaAmerica, our amortization expenses related to intangible assets and
goodwill have increased dramatically. In addition, we amortize our cable
programming distribution agreement payments using the straight-line method over
the term of our affiliate agreement.

OTHER EXPENSE

Total other expenses consist primarily of interest expense, interest
income, write off of deferred offering costs, equity share of loss (income) of
subsidiaries and other miscellaneous items.

RESULTS OF OPERATIONS

The following table sets forth the amount of, and percentage relationship
to total net revenues of, certain items included in our historical consolidated
statements of operations for the periods indicated and certain items included in
our unaudited pro forma consolidated statements of operations for the periods
indicated. This pro forma data gives effect to: (i) the Broadcast Programming
acquisition and (ii) our acquisition of the assets of MediaAmerica (together the
"Pro Forma Transactions"). Pro forma data also assumes that the transactions
above were completed on January 1, of each respective year. We have not
historically disclosed non-significant acquisitions, such as Broadcast
Programming, and are not required to do so in the future. We have provided pro
forma information related to the Pro Forma Transactions in order to provide the
reader with more meaningful comparable results.

Reported
Year Ended December 31,
1998 1999 2000
------------------------- ----------------------- ------------------------
(dollars in thousands)

Revenues:
Network radio ............................. $ 15,148 40% $ 28,522 44% $ 41,991 49%
Cable television programming .............. 16,892 44 27,345 43 34,311 40
Internet advertising sales services ....... -- -- -- -- 1,532 2
Satellite services ........................ 6,172 16 8,499 13 8,007 9
-------- ---- -------- ---- -------- ----
Total revenues .................. 38,212 100 64,366 100 85,841 100
-------- ---- -------- ---- -------- ----
Operating Expenses:
Network radio ............................. 16,173 42 27,924 44 38,390 45
Cable television programming .............. 17,419 46 27,106 42 34,596 40
Internet advertising sales services ....... -- -- -- -- 1,410 2
Satellite services ........................ 5,262 14 5,339 8 4,496 5
-------- ---- -------- ---- -------- ----
Segment total ................... 38,854 102 60,369 94 78,892 92
General and administrative - Corporate .... 1,121 3 1,952 3 2,591 3
-------- ---- -------- ---- -------- ----
Total operating expenses ........ 39,975 105 62,321 97 81,483 95
-------- ---- -------- ---- -------- ----
Operating income (loss) ..... $ (1,763) (5)% $ 2,045 3% $ 4,358 5%
======== ==== ======== ==== ======== ====

Pro Forma
Year Ended December 31,
1998 1999
------------------------- -----------------------
Revenues:

Network radio ............................. $ 27,698 55% $ 33,300 48%
Cable television programming .............. 16,892 33 27,345 40
Satellite services ........................ 6,172 12 8,499 12
-------- ---- -------- ----
Total revenues .................. 50,762 100 69,144 100
-------- ---- -------- ----
Operating Expenses:
Network radio ............................. 31,990 63 33,854 49
Cable television programming .............. 17,419 34 27,106 39
Satellite services ........................ 5,262 10 5,339 8
-------- ---- -------- ----
Segment total ................... 54,671 107 66,299 96
General and administrative - Corporate .... 1,121 2 1,952 3
-------- ---- -------- ----
Total operating expenses ........ 55,792 109 68,251 99
-------- ---- -------- ----
Operating income (loss) ..... $ (5,030) (9)% $ 893 1%
======== ==== ======== ====

The unaudited pro forma data reflects the Pro Forma Transactions as well as
the following adjustments:

a) the elimination of intercompany transactions; and

b) adjustments to general and administrative expenses of $4.2 million and
$2.2 million for the years ended December 31, 1998 and 1999,
respectively, for the amortization of goodwill and intangible assets
related to the Broadcast Programming and MediaAmerica acquisitions.

The following table sets forth EBITDA for the years ended December 31,
1998, 1999 and 2000. EBITDA is unaudited and represents operating income (loss)
plus depreciation and amortization minus EBITDA attributable to the minority
interest in the PIN Venture, a consolidated 55.3%-owned subsidiary. Management
acknowledges that EBITDA is not a measure of performance or liquidity calculated
in accordance with generally accepted accounting principles. However, EBITDA is
a measure widely used by analysts and investors in the media industry to
determine a company's operating performance and ability to service and incur
debt. EBITDA should not be considered in isolation or as a substitute for net
income (loss), cash flows from operating activities or other consolidated income
or cash flow statement data prepared in accordance with accounting principles
generally accepted in the United States or as a measure of profitability or
liquidity.

Reported Pro Forma
Year Ended December 31, Year Ended December 31,
1998 1999 2000 1998 1999
-------- -------- -------- -------- --------

EBITDA:
Network radio ............................. $ 567 $ 5,245 $ 10,277 $ 2,626 $ 6,710
Cable television programming .............. 177 2,332 3,417 177 2,332
Internet advertising sales services ....... -- -- 146 -- --
Satellite services ........................ 4,875 7,186 7,367 4,875 7,186
-------- -------- -------- -------- --------
Segment total ................... 5,619 14,763 21,207 7,678 16,228
-------- -------- -------- -------- --------
General and administrative - Corporate .... (1,116) (1,943) (2,503) (1,116) (1,943)
Less: EBITDA attributable to PIN
venture's minority interest ............ (213) (860) (1,061) (213) (860)
-------- -------- -------- -------- --------
Total EBITDA .................... $ 4,290 $ 11,960 $ 17,643 $ 6,349 $ 13,425
======== ======== ======== ======== ========

QUARTERLY OPERATING RESULTS AND OTHER DATA:

The table below sets forth our quarterly operating data, including radio
station and household data, for each quarter of 1999 and 2000. This quarterly
information is unaudited but, in our opinion, reflects all normally recurring
adjustments necessary for a fair presentation of the information for the periods
presented when read in conjunction with the audited consolidated financial
statements and notes thereto. Operating results for any quarter are not
necessarily indicative of results for any future period.

Quarter Ended
--------------------------------------------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31, March 31, June 30, Sept. 30, Dec, 31,
1999 1999 1999 1999 2000 2000 2000 2000
-------- -------- -------- -------- -------- -------- -------- --------
(unaudited)
(dollars in thousands, except weekly radio listener gross impressions and unique radio station
affiliate data)

Revenues:
Network radio .................. $ 4,534 $ 6,188 $ 8,086 $ 9,714 $ 9,775 $ 10,872 $ 10,634 $ 10,710
Cable television
programming ................. 5,797 6,846 6,586 8,116 8,682 8,310 7,864 9,455
Internet advertising
sales services .............. -- -- -- -- -- 1 1,505 26
Satellite services ............. 2,174 2,203 2,190 1,932 1,710 1,311 1,676 3,310
-------- -------- -------- -------- -------- -------- -------- --------
Total revenues .............. 12,505 15,237 16,862 19,762 20,167 20,494 21,679 23,501
-------- -------- -------- -------- -------- -------- -------- --------
Operating expenses:
Network radio .................. 4,970 5,119 6,029 7,159 7,389 7,912 8,186 8,227
Cable television
programming ................. 5,590 6,075 6,119 7,229 7,646 7,647 7,461 8,140
Internet advertising
sales services .............. -- -- -- -- 101 279 440 566
Satellite services ............. 321 361 329 302 237 123 148 133
General and administrative -
Corporate ................... 348 382 475 738 747 510 610 635
Depreciation and
amortization ................ 1,990 1,981 2,528 4,276 3,393 3,587 3,617 3,749
-------- -------- -------- -------- -------- -------- -------- --------
Total operating (expenses) .. 13,219 13,918 15,480 19,704 19,513 20,058 20,462 21,450
-------- -------- -------- -------- -------- -------- -------- --------
Operating income (loss) ........ (714) 1,319 1,382 58 654 436 1,217 2,051
Interest expense, net .......... 2,879 2,879 3,123 2,848 2,917 2,896 2,886 2,792
Other Expense .................. -- 1 12 (45) (43) (87) 674 39
Income tax provision/benefit
and minority interest ....... 70 397 556 (612) 359 274 74 492
-------- -------- -------- -------- -------- -------- -------- --------
Net loss ....................... $ (3,663) $ (1,958) $ (2,309) $ (2,133) $ (2,579) $ (2,647) $ (2,417) $ (1,272)
======== ======== ======== ======== ======== ======== ======== ========
OTHER DATA:
EBITDA (a) ..................... $ 1,218 $ 2,896 $ 3,748 $ 4,098 $ 3,697 $ 3,771 $ 4,778 $ 5,397
Capital expenditures ........... 274 168 146 262 533 688 1,006 1,228
Cable programming
distribution payments (b) ... 1,471 672 1,618 2,593 2,190 2,660 431 (1,999)
Net cash provided by
(used in):
Operating activities ........ (2,479) 1,910 (208) 3,175 (459) 4,012 (54) 4,294
Investing activities ........ (2,309) (3,826) (21,178) (5,319) (1,845) (3,267) 597 178
Financing activities ........ -- -- 20,100 2,751 (335) 19 (168) (1,342)
AUDIENCE DATA (at end
of period):
Weekly radio listener gross
impressions (in
millions) (c) ............... 1,300 1,358 1,290 1,294 1,233 1,331 1,475 1,443
Unique Radio Station
Affiliates (d) .............. 4,627 4,777 4,866 4,928 4,796 4,949 5,329 5,350
Great American Country
subscribers(e) .............. 8,063 8,659 10,959 11,971 13,094 13,551 13,720 12,799
Great American Country
households according
to Nielsen (f) .............. N/A N/A N/A N/A 13,754 14,742 15,488 15,027
Product Information Network
subscribers (e) ............. 22,551 24,673 28,110 30,094 31,101 31,135 34,268 34,968
Product Information Network
FTREs (g) ................... 10,158 10,843 11,925 13,054 13,341 12,879 13,942 14,649

- -------------------

(a) EBITDA is unaudited and represents operating income (loss) plus
depreciation and amortization minus EBITDA attributable to the minority
interest in the PIN Venture, a consolidated 55.3%-owned subsidiary.
Management acknowledges that EBITDA is not a measure of performance or
liquidity calculated in accordance with generally accepted accounting
principles. However, EBITDA is a measure widely used by analysts and
investors in the media industry to determine a company's operating
performance and ability to service and incur debt. EBITDA should not be
considered in isolation or as a substitute for net income (loss), cash
flows from operating activities or other consolidated income or cash flow
statement data prepared in accordance with generally accepted accounting
principles or as a measure of profitability or liquidity.

(b) Cable programming distribution payments made by GAC to multiple system
cable television operators for carrying GAC programming. These payments are
capitalized as intangible assets on the statements of financial position
and are amortized over the period during which a portion of such payments
is refundable (usually 5 to 10 years). In the fourth quarter of 2000, cable
programming distribution payments made were offset by a refund received
from one of GAC's MSO affiliate which discontinued the service in certain
of its cable television systems.

(c) Weekly listener gross impressions represents the total number of times
consumers are exposed to our radio commercials on average during a week.
This measurement is calculated by multiplying the average quarter hour
audience (AQH) for each of our network radio programs or services times the
number of 30-second equivalent commercial units we have available to sell
each week in each respective product, and summing such results to arrive at
a total weekly listener impression number. Because the weekly listener
gross impression calculation does not differentiate between a one-time
listener or a repeat listener who hears our broadcasted commercials, the
measurement includes multiple commercial impressions recorded for the same
listener. AQH represents the average number of people aged 12 + estimated
to have listened, for a minimum of five minutes during any quarter hour, to
a radio station broadcasting our advertising during the time which we
estimate our commercials are broadcast. These AQH estimates are derived
from data provided by Act I Systems (a third party processor) that is based
on Arbitron copyrighted and proprietary audience estimates, and are not
estimates produced by Arbitron. Weekly radio listener gross impressions
reflect the effect of the asset acquisitions of the assets of MediaAmerica
in July 1998 and Broadcast Programming in August 1999 for these respective
years.

(d) Represents the number of non-duplicated radio station affiliates
broadcasting our commercial inventory in exchange for our network radio
products or services the end of the periods indicated. Unique radio station
affiliates reflect the effect of the asset acquisitions of MediaAmerica in
July 1998 and Broadcast Programming in August 1999.

(g) FTREs represent the number of full-time revenue equivalent subscribers
receiving PIN at the end of the periods indicated. FTRE weights part-time
subscribers based on the number of hours carried, the daypart carried based
on Eastern Standard Time and the revenue associated therewith. Beginning in
1998, we have restated FTREs to reflect daypart carried based on Eastern
Standard Time instead of local time. FTREs based on Eastern Standard Time
more accurately reflect our subscriber information to our advertisers.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 2000

TOTAL REVENUES. Total revenues increased $21.4 million, or 33%, from $64.4
million for the year ended December 31, 1999 to $85.8 million for the year ended
December 31, 2000. This increase was due primarily to strong growth in our
network radio and cable television programming operations, including an increase
in network radio revenues resulting from the Broadcast Programming acquisition.
The increase in revenues was also due to a one-time $1.9 million payment we
received in connection with the termination of the remaining satellite service
commitments of an affiliate in the fourth quarter of 2000 and a one-time
Internet advertising sales services termination payment of $1.5 million received
in the third quarter of 2000. On a pro forma basis, total pro forma revenues
increased $16.7 million, or 24%, from pro forma $69.1 million for the year ended
December 31, 1999 to actual $85.8 million for the year ended December 31, 2000.

TOTAL OPERATING EXPENSES. Total operating expenses increased $11.2 million, or
26%, from $43.2 million for the year ended December 31, 1999 to $54.4 million
for the year ended December 31, 2000. The increase is due primarily to an
increase in operating expenses resulting from the Broadcast Programming
acquisition, increased expenditures related to network radio and cable
television programming, as well as increased operating expenses to develop our
Internet advertising sales business. As a percentage of total revenues, total
operating expenses decreased from 67% for the year ended December 31, 1999 to
63% for the year ended December 31, 2000. On a pro forma basis, total operating
expenses increased $8.5 million, or 18%, from pro forma $45.9 million for the
year ended December 31, 1999 to actual $54.4 million for the year ended December
31, 2000. As a percentage of pro forma total revenues, total pro forma operating
expenses decreased from pro forma 66% for the year ended December 31, 1999 to
actual 63% for the year ended December 31, 2000.

SELLING AND MARKETING. Selling and marketing expenses increased $3.8 million, or
59%, from $6.4 million for the year ended December 31, 1999 to $10.2 million for
the year ended December 31, 2000. This increase is due primarily to increased
expenditures to attract additional radio and cable television affiliates,
increased selling and marketing expenses incurred to launch new radio programs
and an increase in selling and marketing expenditures resulting from the
Broadcast Programming acquisition. On a pro forma basis, selling and marketing
expenses increased $3.3 million, or 47%, from pro forma $6.9 million for the
year ended December 31, 1999 to actual $10.2 million for the year ended December
31, 2000.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased $0.6
million, or 29%, from $1.9 million for the year ended December 31, 1999 to $2.5
million for the year ended December 31, 2000. This change was due to increases
in Internet-related support expenses, management personnel, operational and
other expenses.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses increased
$3.6 million, or 33%, from $10.8 million for the year ended December 31, 1999 to
$14.4 million for the year ended December 31, 2000. This increase is due
primarily to an increase in amortization expenses related to the Broadcast
Programming acquisition and the amortization of payments made under certain
cable programming distribution agreements. On a pro forma basis, depreciation
and amortization expenses increased $1.0 million, or 7%, from pro forma $13.4
million for the year ended December 31, 1999 to actual $14.4 million for the
year ended December 31, 2000.

TOTAL OPERATING INCOME. Operating income increased $2.3 million, from $2.1
million for the year ended December 31, 1999 to $4.4 million for the year ended
December 31, 2000, as a result of the factors stated above. Pro forma operating
income increased $3.5 million, from pro forma $0.9 million for the year ended
December 31, 1999 to actual $4.4 million for the year ended December 31, 2000.

TOTAL EBITDA. EBITDA increased $5.7 million, or 48%, from $11.9 million for the
year ended December 31, 1999, to $17.6 million for the year ended December 31,
2000. Pro forma EBITDA increased $4.2 million, or 31%, from pro forma $13.4
million for the year ended December 31, 1999, to actual $17.6 million for the
year ended December 31, 2000, as a result of the factors stated above.

TOTAL OTHER EXPENSE. Total other expense increased $0.4 million, or 3%, from
$11.7 million for the year ended December 31, 1999 to $12.1 million for the year
ended December 31, 2000. The increase is due primarily to:

- a $0.7 million in expenses related to the write off of deferred equity
offering costs. As a result of the withdrawal of our proposed equity
offering in October 2000, we have expensed all deferred equity
offering costs in 2000;

- a $0.2 million increase in other income;

- a $0.1 million decrease in equity income of subsidiaries; and

- a $0.2 million decrease in interest expense.

TOTAL NET LOSS. Net loss decreased $1.2 million, or 11%, from $(10.1) million
for the year ended December 31, 1999 to $(8.9) million for the year ended
December 31, 2000. Pro forma net loss decreased $(2.6) million, or 22%, from a
net loss of $(11.5) million for the year ended December 31, 1999 to a net loss
of $(8.9) million for the year ended December 31, 2000.

NETWORK RADIO

REVENUES. Network radio revenues increased $13.5 million, or 47%, from $28.5
million for the year ended December 31, 1999 to $42.0 million for the year ended
December 31, 2000, due primarily to an increase in radio advertising revenue. In
addition, the acquisition of the assets of Broadcast Programming on August 2,
1999 significantly contributed to the increase in revenues. Separate from
Broadcast Programming, advertising revenues increased $6.2 million due to
significant increases in rates charged for our advertising spots and in the
number of spots sold. There was a decrease of $0.4 million in radio license
fees, reflecting our decision to focus our programming targeted at larger radio
stations that generally are not charged license fees. On a pro forma basis,
network radio revenues increased $8.7 million, or 26%, from pro forma $33.3
million for the year ended December 31, 1999 to actual $42.0 million for the
year ended December 31, 2000.

During 2000, we benefited from strong network radio advertising demand,
driven primarily by strong economic conditions which demand was further enhanced
by a significant increase in the use of network radio advertising by Internet
companies. Due to this increased demand for network radio advertising in 2000,
our network radio business experienced significantly higher advertising rates
and inventory sell-out percentages.

EXPENSES. Network radio expenses increased $10.5 million, or 37%, from $27.9
million for the year ended December 31, 1999 to $38.4 million for the year ended
December 31, 2000. This increase was primarily due to:

- $6.5 million increase in operating expenses as a result of the
Broadcast Programming acquisition, including depreciation and
amortization expenses of $2.3 million;

- $1.9 million increase in operating expenses due to the increase in the
number of syndicated radio programs we offered including increased
license fees for certain programming, as well as an increase in the
number of radio station affiliates;

- $1.5 million increase in selling and marketing expenses to increase
the number of radio stations receiving our existing programming and to
launch new programs; and

- $0.6 million increase in depreciation and amortization expenses
related to new equipment purchased for the upgrades of certain radio
programming studios, purchase of new satellite receivers and purchase
of new computer hardware and software;

- $0.5 million increase in management and support costs;

- $0.3 million increase in Internet programming content expenses related
to the development of companion websites for our radio programming;
and

- $0.8 million decrease related to the write off of capitalized costs
for programs in 1999 with no similar expense incurred in 2000. This
write off was recorded in depreciation and amortization expense.

As a percentage of network radio revenues, network radio expenses decreased
from 98% for the year ended December 31, 1999 to 91% for the year ended December
31, 2000. The decrease in network radio expenses as a percentage of network
radio revenues is due primarily to the increase in network radio revenues
resulting from improved advertising rates and sellout conditions in 2000. In
addition, a significant portion of our network radio expenses is fixed in
nature.

On a pro forma basis, network radio expenses increased $4.5 million, or
13%, from pro forma $33.9 million for the year ended December 31, 1999 to actual
$38.4 million for the year ended December 31, 2000. As a percentage of pro forma
network radio revenues, pro forma radio programming expenses decreased from pro
forma 102% for the year ended December 31, 1999 to actual 91% for the year ended
December 31, 2000.

OPERATING INCOME. Operating income increased $3.0 million from operating income
of $0.6 million for the year ended December 31, 1999 to operating income of $3.6
million for the year ended December 31, 2000 as a result of the factors stated
above. Pro forma operating income (loss) increased $4.2 million from operating
loss of pro forma $(0.6) million for the year ended December 31, 1999 to
operating income of actual $3.6 million for the year ended December 31, 2000.

SEGMENT EBITDA. Segment EBITDA increased $5.0 million, or 96%, from $5.3 million
for the year ended December 31, 1999, to $10.3 million for the year ended
December 31, 2000 as a result of the factors stated above. Pro forma EBITDA
increased $3.5 million, or 53%, from pro forma $6.8 million for the year ended
December 31, 1999, to actual $10.3 million for the year ended December 31, 2000.

CABLE TELEVISION PROGRAMMING

REVENUES. Cable television programming revenues increased $7.0 million, or 25%,
from $27.3 million for the year ended December 31, 1999 to $34.3 million for the
year ended December 31, 2000. This increase was due to the following:

- GAC's revenues increased $3.4 million, or 67%, as a result of a $2.8
million, or 79%, increase in advertising revenues and a $0.6 million,
or 38%, increase in license fees. Advertising revenues increased due
to higher advertising rates charged for airtime based on a 7% increase
in the number of subscribers receiving GAC (as reported by cable
operators), with launches in markets such as Milwaukee, Corpus
Christi, Beaumont, Southwest Texas and Salt Lake City. However, these
new subscribers were offset by a loss of approximately 1.5 million
subscribers from one of its MSO affiliates. In early 2000, GAC became
a Nielsen-rated network, enabling it to attract significantly more
national advertisers and, as a result, increase revenues derived from
traditional national spot advertising.

- PIN's revenues increased $3.6 million, or 16%, primarily as a result
of an 12% increase in FTREs receiving PIN.

EXPENSES. Cable television programming expenses rose $7.5 million, or 28%, from
$27.1 million for the year ended December 31, 1999 to $34.6 million for the year
ended December 31, 2000. This was primarily due to:

- an increase of $2.9 million in rebates to cable systems receiving PIN,
which was driven by an 12% increase in FTREs receiving PIN from
December 31, 1999 to December 31, 2000;

- an increase of $1.6 million in depreciation and amortization expenses
primarily related to the amortization of additional GAC cable
programming distribution agreement payments;

- an increase of $1.6 million as a result of new associates hired to
sell GAC traditional spot advertising and a national audience ratings
services subscribed to by GAC beginning in January 2000;

- an increase of $1.4 million as a result of the development and
enhancement of GAC's companion websites;

- an increase of $0.6 million in cable television programming expenses
to expand the number of hours of original programming and other
promotional expenses; and

- a decrease of $0.6 million in GAC's management and other expenses.

For each of the years ended December 31, 1999 and 2000, PIN made rebates of
approximately 75% and 76%, respectively, of its advertising revenues to systems
receiving its programming. Rebates paid to cable systems receiving its
programming have remained relatively constant over the comparable periods on a
per FTRE's basis. However, as FTRE's continue to grow, total cable television
programming expenses will increase because PIN will pay out additional rebates
to cable systems. As a percentage of cable television programming revenues,
cable television programming expenses increased from 99% for the year ended
December 31, 1999 to 101% for the year ended December 31, 2000.

As part of our efforts to increase GAC subscriber distribution, GAC entered
into a digital satellite

distribution agreement with AT&T's Headend in the Sky, Inc. ("HITS") which will
enable GAC to broadcast its programming on the HITS digital platform to cable
systems who elect to carry GAC on their digital programming tiers. Digital
satellite distribution expenses increased approximately $40,000 per month
beginning in November 2000 and we estimate that expenses will increase to
approximately $70,000 per month in the fourth quarter of 2001.

Starting in the fourth quarter of 1999, we developed and enhanced a
companion website to the GAC network. Internet programming and content expenses
for this companion website commenced in the fourth quarter of 1999 and increased
throughout 2000. This website generates e-commerce revenues by selling products
to web site visitors; however, we did not generate significant e-commerce
revenues from this website in 2000. Given the lack of meaningful revenues
generated thus far, we are currently evaluating the future business strategy and
prospects of this companion website. Organizational changes and other measures
have been undertaken in order to reduce costs and re-direct resources to better
promote the GAC network via the Internet.

OPERATING INCOME (LOSS). Operating income (loss) decreased $0.5 million from an
operating income of $0.2 million for the year ended December 31, 1999 to an
operating loss of $(0.3) million for the year ended December 31, 2000 as a
result of the factors stated above.

SEGMENT EBITDA. Segment EBITDA before the deduction of EBITDA attributable to
the PIN Venture's minority interest, increased $1.1 million from $2.3 million
for the year ended December 31, 1999, to $3.4 million for the year ended
December 31, 2000 as a result of the factors stated above.

INTERNET ADVERTISING SALES

In 2000, we began offering Internet advertising sales services with a focus
on streaming media advertising. Operating expenses for Internet advertising
services increased beginning in January 2000 and continued to increase
throughout 2000, as we built a sales and technology infrastructure.

REVENUES. We generated Internet advertising sales services revenues of $1.5
million for the year ended December 31, 2000. Substantially all of these
revenues are related to an early termination to an agreement we negotiated with
a third party to sell Internet advertising time and provide other services. The
termination of this agreement resulted in a one-time cash payment of $1.5
million, which was recorded as Internet advertising sales services revenue
during the third quarter of 2000.

EXPENSES. We incurred Internet advertising sales services expenses of $1.4
million for the year ended December 31, 2000.

OPERATING INCOME (LOSS). We generated operating income from our Internet
advertising sales services of $0.1 million for the year ended December 31, 2000.

SEGMENT EBITDA. We generated a segment EBITDA from Internet advertising sales
services of $0.1 million for the year ended December 31, 2000.

SATELLITE SERVICES

REVENUES. Satellite services revenues decreased $0.5 million, or 6%, from $8.5
million for the year ended

December 31, 1999 to $8.0 million for the year ended December 31, 2000. This
decrease was primarily due to:

- the expiration in August 1999 of a third party satellite services
agreement and the termination in January 2000 of another third party
satellite services agreement, which combined generated $1.0 million in
satellite services revenues in the year ended December 31, 1999; and

- $1.9 million decrease in satellite services fees charged to an
affiliated party because of reduced service levels required by the
affiliate when it ceased network operations at the end of the first
quarter of 2000.

These decreases in revenues were partially offset by:

- $1.9 million increase in satellite services revenues due to a one-time
payment we received in connection with the termination of the
remaining satellite service commitments of an affiliate; and

- $0.5 million increase in satellite services revenues due to a
three-month agreement to lease two satellite transponder channels as
well as other uplinking and earth station services to a third party.
This agreement commenced on July 15, 2000 and terminated on October
15, 2000.

EXPENSES. Satellite services expenses decreased $0.8 million, or 16%, from $5.3
million for the year ended December 31, 1999 to $4.5 million for the year ended
December 31, 2000. This decrease is primarily due to cost savings realized as a
result of the related party ceasing all programming operations as of March 31,
2000 as discussed herein. As a percentage of satellite services revenues,
satellite services expenses decreased from 63% for the year ended December 31,
1999 to 56% for the year ended December 31, 2000. Because a significant portion
of the costs of our satellite services is fixed, when we increase our
utilization of the excess capacity on our Satcom C-3 transponder, the percentage
of satellite services expenses in relation to the satellite services revenues
decreases. Due to the unpredictability of demand for transponder capacity from
cable television networks, there can be no assurance that we will be successful
in leasing our excess satellite transponder capacity.

OPERATING INCOME. Operating income increased $0.3 million from $3.2 million for
the year ended December 31, 1999 to $3.5 million for the year ended December 31,
2000 as a result of the factors stated above.

SEGMENT EBITDA. Segment EBITDA increased $0.2 million, or 2%, from $7.2 million
for the year ended December 31, 1999, to $7.4 million for the year ended
December 31, 2000 as a result of the factors stated above.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1999

TOTAL REVENUES. Total revenues increased $26.2 million, or 68%, from $38.2
million for the year ended December 31, 1998 to $64.4 million for the year ended
December 31, 1999. This increase was due to strong growth in our operations, as
well as the Broadcast Programming and MediaAmerica acquisitions. On a pro forma
basis, total pro forma revenues increased $18.3 million, or 36%, from $50.8
million for the year ended December 31, 1998 to $69.1 million for the year ended
December 31, 1999.

TOTAL OPERATING EXPENSES. Total operating expenses increased $16.0 million, or
59%, from $27.2 million for the year ended December 31, 1998 to $43.2 million
for the year ended December 31, 1999. As a percentage of total revenues, total
operating expenses decreased from 71% for the year ended December 31, 1998 to
67% for the year ended December 31, 1999. On a pro forma basis, total operating
expenses increased $9.3 million, or 25%, from $36.6 million for the year ended
December 31, 1998 to $45.9 million for the year ended December 31, 1999. As a
percentage of pro forma total revenues, total pro forma operating expenses
decreased from 72% for the year ended December 31, 1998 to 66% for the year
ended December 31, 1999.

SELLING AND MARKETING. Selling and marketing expenses increased $1.0 million, or
19%, from $5.4 million for the year ended December 31, 1998 to $6.4 million for
the year ended December 31, 1999. On a pro forma basis, selling and marketing
expenses increased $0.5 million, or 8%, from $6.4 million for the year ended
December 31, 1998 to $6.9 million for the year ended December 31, 1999.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased $0.8
million, or 74%, from $1.1 million for the year ended December 31, 1998 to $1.9
million for the year ended December 31, 1999. This change was due to increases
in additional management, operational and Internet-related support and other
expenses.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses increased
$4.5 million, or 72%, from $6.3 million for the year ended December 31, 1998 to
$10.8 million for the year ended December 31, 1999. On a pro forma basis,
depreciation and amortization expenses increased $1.8 million, or 16%, from
$11.6 million for the year ended December 31, 1998 to $13.4 million for the year
ended December 31, 1999.

TOTAL OPERATING INCOME (LOSS). Operating income (loss) increased $3.8 million
from operating loss of $(1.7) million for the year ended December 31, 1998 to
operating income of $2.1 million for the year ended December 31, 1999 as a
result of the factors stated above. Pro forma income (loss) increased $5.9
million from operating loss of $(5.0) million for the year ended December 31,
1998 to operating income of $0.9 million for the year ended December 31, 1999.

TOTAL EBITDA. EBITDA increased $7.7 million, or 179%, from $4.3 million for the
year ended December 31, 1998, to $11.9 million for the year ended December 31,
1999. Pro forma EBITDA increased $7.1 million, or 112%, from $6.3 million for
the year ended December 31, 1998, to $13.4 million for the year ended December
31, 1999.

TOTAL OTHER EXPENSE. Total other expense increased $2.3 million, or 24%, from
$9.4 million for the year ended December 31, 1998 to $11.7 million for the year
ended December 31, 1999. This change is due primarily to an increase of $6.1
million in interest expense related to our Senior Notes and an increase of $0.5
million in interest expense related to the amortization of offering costs
related to our Senior Notes. The increase was partially offset by:

- a $3.0 million decrease in interest expense related to the repayment
of debts from the proceeds from our Senior Notes;

- a $1.2 million decrease in other expenses; and

- a $0.3 million increase in interest income earned on cash, cash
equivalents and available for sale securities.

In 1998, we incurred debt offering related expenses of $0.9 million. No similar
expenses were incurred in 1999.

TOTAL NET LOSS. Net loss decreased $1.4 million, or 12%, from $(11.5) million
for the year ended December 31, 1998 to $(10.1) million for the year ended
December 31, 1999. Pro forma net loss decreased $6.8 million, or 37%, from a net
loss of $(18.3) million for the year ended December 31, 1998 to a net loss of
$(11.5) million for the year ended December 31, 1999.

NETWORK RADIO

REVENUES. Network radio revenues increased $13.4 million, or 88%, from $15.1
million for the year ended December 31, 1998 to $28.5 million for the year ended
December 31, 1999, due primarily to an increase in radio advertising revenue and
the acquisitions of MediaAmerica and the assets of Broadcast Programming. On a
pro forma basis, network radio revenues increased $5.6 million, or 20%, from
$27.7 million for the year ended December 31, 1998 to $33.3 million for the year
ended December 31, 1999.

During the latter half of 1999, we benefited from strong network radio
advertising demand, driven primarily by strong economic conditions and a
significant increase in the use of network radio advertising by Internet
companies. Due to increased demand for radio advertising, our network radio
business experienced an increase in advertising rates and inventory sellout
percentages. In addition, sales of radio advertising for 1998 were adversely
affected by the January 1998 entry of a significant competitor into the market,
which added approximately 20% more network radio advertising inventory.

EXPENSES. Network radio expenses increased $11.8 million, or 73%, from $16.1
million for the year ended December 31, 1998 to $27.9 million for the year ended
December 31, 1999. This increase was primarily due to:

- $4.4 million increase in operating expenses as a result of the
MediaAmerica acquisition on July 10, 1998;

- $3.7 million increase in operating expenses as a result of the
Broadcast Programming acquisition;

- $2.0 million in amortization expenses related to the Broadcast
Programming and MediaAmerica acquisitions;

- $0.8 million increase related to the write off of capitalized costs
for programs that are no longer distributed;

- $0.5 million in selling and marketing expenses to increase the number
of radio stations receiving our programming; and

- $0.3 million increase in fees paid to license certain radio
programming; and

- $0.1 million increase in operating expenses reflecting an increase in
the number of syndicated radio programs we offered.

As a percentage of network radio revenues, network radio expenses decreased
from 107% for the year ended December 31, 1998 to 98% for the year ended
December 31, 1999. The decrease in network radio expenses as a percentage of
network radio revenues is due primarily to the increase in network radio
revenues resulting from improved advertising rates and sellout conditions in
1999. In addition, a significant portion of our network radio expenses is fixed
in nature.

On a pro forma basis, network radio expenses increased $1.9 million, or 6%,
from $32.0 million for the year ended December 31, 1998 to $33.9 million for the
year ended December 31, 1999. As a percentage of pro forma network radio
revenues, pro forma network radio expenses decreased from 115% for the year
ended December 31, 1998 to 102% for the year ended December 31, 1999.

OPERATING INCOME (LOSS). Operating income (loss) increased $1.6 million from
operating loss of $(1.0) million for the year ended December 31, 1998 to
operating income of $0.6 million for the year ended December 31, 1999 as a
result of the factors stated above. Pro forma operating income (loss) increased
$3.7 million from operating loss of $(4.3) million for the year ended December
31, 1998 to operating loss of $(0.6) million for the year ended December 31,
1999

SEGMENT EBITDA. Segment EBITDA increased $4.7 million, or 825%, from $0.6
million for the year ended December 31, 1998, to $5.3 million for the year ended
December 31, 1999. Pro forma EBITDA increased $4.1 million, or 156%, from $2.7
million for the year ended December 31, 1998, to $6.8 million for the year ended
December 31, 1999.

CABLE TELEVISION PROGRAMMING

REVENUES. Cable television programming revenues increased $10.4 million, or 62%,
from $16.9 million for the year ended December 31, 1998 to $27.3 million for the
year ended December 31, 1999. This increase was due to the following:

- PIN's revenues increased $8.0 million, or 56%, primarily as a result
of a 50% increase in FTREs receiving PIN. During 1999, PIN also added
a number of significant cable television systems and advertising
markets including Boston, Dallas, Houston, Miami, Salt Lake City, Las
Vegas and Detroit. The number of full-time revenue equivalent
subscribers, or FTRE's, receiving PIN increased by 3.0 million, or
30%, from December 31, 1998 to December 31, 1999. The number of
households receiving PIN increased by 9.5 million, or 46%, from
December 31, 1998 to December 31, 1999.

- GAC's revenues increased $2.4 million, or 97%, as a result of a $2.2
million, or 181%, increase in advertising revenues and a $0.2 million,
or 14%, increase in license fees. Advertising revenues increased due
to higher advertising rates charged for airtime based on a 68%
increase in the number of subscribers receiving GAC. During 1999, GAC
added numerous, significant cable television systems and advertising
markets including Atlanta, Detroit, Minneapolis, Sacramento, Salt Lake
City, Baltimore, Knoxville and Los Angeles. GAC subscribers (as
reported by cable operators) increased by 4.8 million, or 68%, from
December 31, 1998 to December 31, 1999. This increase in subscribers
allowed GAC to increase its advertising rates.

EXPENSES. Cable television programming expenses rose $9.7 million, or 56%, from
$17.4 million for the year ended December 31, 1998 to $27.1 million for the year
ended December 31, 1999. This was primarily due to an increase of $6.3 million
in rebates to cable systems receiving PIN, driven by an increase in the number
of FTREs receiving PIN and an increase in PIN revenues of $8.0 million from
December 31, 1998 to December 31, 1999. The remaining increase in cable
television expenses resulted from an increase in GAC affiliate sales costs
related to absorption of a higher proportion of total affiliate sales costs; an
increase in management and cable television programming support expenses; an
increase in amortization expenses for GAC cable programming distribution
agreement payments; an increase in marketing expenses to improve the
distribution of GAC and an increase in programming expenses incurred to develop
GAC programming.

For each of the years ended December 31, 1998 and 1999, PIN made rebates of
approximately 73% and 75%, respectively, of its advertising revenues to systems
receiving its programming. Rebates paid to cable systems receiving its
programming have remained relatively constant over the comparable periods on a
per FTRE's basis. As a percentage of cable television programming revenues,
cable television programming expenses decreased from 103% for the year ended
December 31, 1998 to 99% for the year ended December 31, 1999.

Historically we shared a cable television affiliate sales department with a
related company. Because this company ceased distribution efforts in the last
quarter of 1999, cable television affiliate sales expenses increased beginning
in the last quarter of 1999 and continued to increase in 2000.

OPERATING INCOME (LOSS). Operating income (loss) increased $0.7 million from an
operating loss of $(0.5) million for the year ended December 31, 1998 to an
operating income of $0.2 million for the year ended December 31, 1999 as a
result of the factors stated above.

SEGMENT EBITDA. Segment EBITDA increased $2.1 million from $0.2 million for the
year ended December 31, 1998, to $2.3 million for the year ended December 31,
1999.

SATELLITE SERVICES

REVENUES. Satellite services revenues increased $2.3 million, or 38%, from $6.2
million for the year ended December 31, 1998 to $8.5 million for the year ended
December 31, 1999. This increase was driven largely by:

- $1.9 million in revenues from new third party satellite transponder
and earth station agreements that we entered into in the second half
of 1998 and second quarter of 1999; and

- $0.4 million increase in satellite services fees charged to affiliated
parties.

EXPENSES. Satellite services expenses remained relatively flat at $5.3 million
for the years ended December 31, 1998 and 1999. As a percentage of satellite
services revenues, satellite services expenses decreased from 85% for the year
ended December 31, 1998 to 63% for the year ended December 31, 1999.

OPERATING INCOME (LOSS). Operating income (loss) increased $2.3 million from
$0.9 million for the year ended December 31, 1998 to $3.2 million for the year
ended December 31, 1999 as a result of the factors stated above.

SEGMENT EBITDA. Segment EBITDA increased $2.3 million, or 47%, from $4.9 million
for the year ended December 31, 1998, to $7.2 million for the year ended
December 31, 1999.

SEASONALITY AND QUARTERLY FLUCTUATIONS

Our advertising revenues in the radio and cable television industries
fluctuate due to seasonality in these industries. We believe that our network
radio revenues are typically lowest in the first quarter and cable television
network revenues are typically lowest in the third quarter. With the acquisition
of the assets of Broadcast Programming, which increased our presence in network
radio, we expect that our seasonal trend of lower first quarter revenues will be
more significant because network radio will be a greater percentage of our total
revenues. Other than fees paid to third parties for certain of our network
radio, fees paid in connection with the distribution of PIN and the sales
commissions paid to account executives for radio and advertising sales services,
our expenses have not historically varied significantly relative to the seasonal
fluctuation of revenues. Our quarterly and annual results of operations are
affected by a wide variety of factors, many of which are outside of our control
and could materially and adversely affect our profitability. These factors
include the timing and volume of advertising on our radio and cable television
networks, the number and size of the radio stations that carry our radio
programming, the number and size of cable systems and video distributors that
carry PIN and GAC and overall economic conditions.

The following table reflects the unaudited percentage of total revenues for
each business segment received in each quarter of each of 1999 and 2000,
adjusted to give effect to our acquisition of Broadcast Programming as if it had
occurred at the beginning of 1999.

Quarter Ended
-------------------------------------------------------------------------------------
Mar 31, June 30, Sept. 30, Dec. 31, Mar 31, June 30, Sept. 30, Dec. 31,
1999 1999 1999 1999 2000 2000 2000 2000
-------- -------- -------- -------- -------- -------- -------- --------

Pro Forma:
Network Radio .................. 19% 25% 27% 29% 23% 26% 25% 26%
Cable television programming ... 21% 25% 24% 30% 25% 24% 23% 28%

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have incurred net losses, primarily as a result of
expenses associated with developing and launching our programming networks as
well as financing costs. For the years ended December 31, 1998, 1999 and 2000,
we incurred net losses of $(11.5) million, $(10.1) million and $(8.9) million,
respectively. Net cash provided by (used in) operating activities for the years
ended December 31, 1998, 1999 and 2000 was $(7.1) million, $2.4 million and $7.8
million, respectively.

The implementation of our growth strategies depends on a number of factors,
including the availability of cash generated from operations and available cash
balances, and may require additional equity and/or debt financings, particularly
to make significant acquisitions. Our indenture currently permits secured
borrowings of up to $20.0 million. Currently, we do not have a credit facility
in place which would make available such borrowings. We had cash and cash
equivalents and available for sale securities of $18.6 million as of December
31, 2000. We believe that our cash balances, available for sale securities and
operating cash flow, including the cash flows of and dividends and distributions
from our subsidiaries, will fund our operating cash flow requirements through
2001.

We will continue to depend significantly upon the earnings and cash flows
of, and dividends and distributions from, our subsidiaries to pay our expenses,
meet our obligations and pay interest and principal on our Senior Notes and our
other indebtedness as it may exist from time-to-time. While the terms of the PIN
Venture generally require the mutual consent of ourselves and our joint venture
partner to distribute or advance funds to ourselves, there are no significant
contractual restrictions on distributions from our subsidiaries.

We anticipate 2001 will be a difficult year for our cable television
programming segment from an advertising sales and distribution perspective. PIN,
and to a lesser extent GAC, are experiencing a soft cable television advertising
sales market caused by a slowing economy and the resulting adverse impact on
commercial inventory demand and national advertising spot rates. In addition, a
lack of new infomercials and a decreasing number of infomercial suppliers are
also negatively impacting PIN's revenues. If the cable television advertising
sales market does not improve through the remainder of 2001, the partners in the
PIN Venture may have to contribute additional capital to fund the PIN Venture
through 2001.

Our efforts to increase GAC subscriber distribution in 2001 is largely
dependent upon our ability to attract cable operators to carry GAC on their
digital programming tiers and to secure carriage with one or more direct
broadcast satellite providers. Because cable operators have been slow to deploy
their digital tiers, we anticipate GAC's subscriber distribution will grow
modestly in 2001.

INVESTING ACTIVITIES

For the years ended December 31, 1999 and 2000, net cash used in investing
activities was $(32.6) million and $(4.3) million, respectively.

Our investing activities for the year ended December 31, 2000 consisted
primarily of the following:

- $3.2 million proceeds from the sale of available for sale securities;

- $(3.3) million in cable programming distribution agreement payments
for GAC;

- $(0.8) million to purchase certain radio programs and other intangible
assets; and

- $(3.5) million for the purchase of property and equipment.

Our investing activities for the year ended December 31, 1999 consisted
primarily of:

- $(20.9) million for the Broadcast Programming acquisition;

- $(6.4) million in cable programming distribution agreement payments
for GAC;

- $(4.2)million in purchase of available for sale securities; and

- $(0.8) million for the purchase of property and equipment.

Total capital expenditures for 2001 are estimated to be approximately $4.3
million, which will be used

primarily to upgrade certain cable television and radio related earth station
equipment, satellite receivers and to purchase computer hardware and develop
software for the Internet advertising sales services segment. Total cable
programming distribution agreement payments for GAC for 2001 are estimated to be
approximately $5.0 million.

FINANCING ACTIVITIES

Net cash provided by (used in) financing activities for the years ended
December 31, 1999 and 2000 was $22.9 million and $(1.8) million, respectively.

Net cash used in financing activities for the year ended December 31, 2000
was $(1.8) million. Net cash used in financing activities consisted of $(0.5)
million of costs related to an attempted initial public offering of our Class A
Common Stock. Such costs included financial printing, legal counsel, independent
public accountants, regulatory and stock exchange registration fees, and other
various costs associated with the offering. As a result of our withdrawal of
this proposed equity offering, we have expensed all deferred offering costs
relating to this equity offering. All of such costs were expensed in the third
quarter of 2000. In addition, a distribution of $1.3 million was paid to the PIN
Venture's minority partner in the fourth quarter of 2000.

Our financing activities for the year ended December 31, 1999 consisted of
the issuance of $24.0 million of our Series A Convertible Preferred Stock. We
used $20.0 million of the proceeds from our Series A Convertible Preferred Stock
issuance to repay $20.0 million of indebtedness under our $20.0 million credit
facility. The balance was used to develop our companion radio and cable
television programming websites. Also, a distribution of $0.9 million was paid
to the PIN Venture's minority partner in 1999.

In October 2000, we withdrew our registration for an initial public
offering due to unfavorable market conditions. At such time as market conditions
improve, we will reconsider an initial public offering of our Class A Common
Stock. We are considering a number of financing alternatives to provide us with
additional liquidity to implement our growth strategies. However, current equity
and debt market conditions for media companies in general are unfavorable and it
is unlikely we would raise additional equity or debt capital until such market
conditions improve. There can be no assurance we will be successful in these
efforts or that financing will be available on terms we view as acceptable.

On July 29, 1999, we entered into a $20.0 million credit facility with a
commercial bank to finance the Broadcast Programming acquisition on a short-term
basis. In order to allow us to obtain more favorable terms, Jones International
guaranteed the loan and provided certain collateral as security for the
guaranty. The credit facility bore interest either at the commercial bank's
prime rate minus two percent or a fixed rate (which is approximately equal to
LIBOR) plus .5%. This credit facility expired on June 30, 2000.

As a result of the 1999 transfer of a controlling interest in Jones
Intercable, Jones Intercable ceased offering many administrative and related
services to the various entities affiliated with Mr. Jones. Expenses related to
these administrative and related services had been divided among the various
entities affiliated with Mr. Jones. Beginning in the second half of 1999,
increases in certain overhead and related costs, including rent, computer
services, insurance and certain personnel costs increased by approximately
$35,000 to $50,000 per month. These expenses are expected to remain at levels
consistent with the second quarter of 2000 through 2001.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial
position, results of operations, or cash flows due to adverse changes in
financial market prices. We are exposed to market risk through interest rates.
This exposure is directly related to our normal funding and investing
activities.

As of December 31, 2000, none of our current liabilities was subject to
changes in interest rates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Page
----

Report of Independent Public Accountants 42

Consolidated Statements of Financial Position 43

Consolidated Statements of Operations 44

Consolidated Statements of Changes in Shareholders' Equity (Deficit) 45

Consolidated Statements of Cash Flows 46

Notes to Consolidated Financial Statements 47

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Jones Media Networks, Ltd.:

We have audited the accompanying consolidated statements of financial
position of Jones Media Networks, Ltd. (a Colorado corporation) and its
subsidiaries (collectively, the "Company") as of December 31, 1999 and 2000 and
the related consolidated statements of operations, changes in shareholders'
equity (deficit) and cash flows for each of the three years ended December 31,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 Media Networks, Ltd.
and its subsidiaries as of December 31, 1999 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United States.

Arthur Andersen LLP

Denver, Colorado
February 2, 2001

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 31,
1999 2000
------------- -------------

ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................................ $ 13,270,784 $ 14,900,333
Available for sale securities .................................... 6,888,741 3,711,739
Accounts receivable, net of allowance for doubtful accounts
of $1,192,818 and $2,017,478, respectively .................... 14,049,008 15,991,148
Accounts receivable - Jones International, Ltd (Notes 2 and 9) ... 382,221 --
Receivables from affiliates ...................................... 473,759 --
Prepaid expenses ................................................. 284,863 415,769
Other current assets ............................................. 693,218 915,157
------------- -------------
Total current assets ........................................ 36,042,594 35,934,146
------------- -------------
Property and equipment, net (Notes 2 and 3) ...................... 22,959,104 20,832,993
Intangibles assets, net (Notes 2 and 4) .......................... 63,642,270 59,822,488
Investment in affiliates ......................................... 309,117 --
Deferred financing costs, net of accumulated
amortization of $960,077 and $1,735,429,
respectively (Note 2) .......................................... 4,138,699 3,363,347
Deferred equity offering costs (Note 2) .......................... 240,859 --
Other non-current assets ......................................... 1,128,902 1,587,156
------------- -------------
Total assets ................................................ $ 128,461,545 $ 121,540,130
============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable--trade .......................................... $ 4,738,526 $ 6,077,876
Producers' fees payable .......................................... 5,307,947 5,351,664
Cable programming distribution payments payable .................. 3,236,996 2,238,934
Accounts payable--Jones International, Ltd. (Notes 2 and 9) ...... -- 232,260
Accrued liabilities and other current liabilities ................ 2,328,858 3,195,484
Interest payable ................................................. 5,875,000 5,875,000
Deferred revenues (Note 2) ....................................... 1,309,155 657,536
------------- -------------
Total current liabilities ................................... 22,796,482 23,628,754
------------- -------------
LONG-TERM LIABILITIES:
Customer deposits and deferred revenues .......................... 581,700 601,026
Other long-term liabilities ...................................... 602,791 1,026,131
Senior secured notes (Note 10) ................................... 100,000,000 100,000,000
------------- -------------
Total long-term liabilities ................................. 101,184,491 101,627,157
------------- -------------

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES (Note 2) ............. 565,149 297,874
------------- -------------
COMMITMENTS AND CONTINGENCIES (NOTE 17):
Class A Common Stock subject to put, $0.01 par
value: 126,405 shares and 136,540 shares
authorized and outstanding, respectively ....................... 1,213,488 1,310,784
------------- -------------
SHAREHOLDERS' EQUITY (DEFICIT):
Series A Preferred Stock, $.01 par value:
1,918,000 shares authorized, 1,918,000 shares
issued and outstanding (Note 8) ................................ 23,975,000 23,975,000
Class A Common Stock, $.01 par value:
100,000,000 shares authorized; 5,286,521 and
5,329,463 shares issued and outstanding,
respectively (Note 2) .......................................... 52,685 53,295
Class B Common Stock, $.01 par value:
2,231,400 shares authorized; 2,231,400 shares
issued and outstanding (Note 2) ............................... 22,314 22,314
Additional paid-in capital ....................................... 27,588,370 28,453,436
Accumulated other comprehensive loss ............................. (25,652) (2,299)
Accumulated deficit .............................................. (48,910,782) (57,826,185)
------------- -------------
Total shareholders' equity (deficit) ........................ 2,701,935 (5,324,439)
------------- -------------
Total liabilities and shareholders' equity (deficit) ........ $ 128,461,545 $ 121,540,130
============= =============

The accompanying notes are an integral part of these consolidated financial
statements.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year ended December 31,
1998 1999 2000
------------ ------------ ------------

Revenues, including revenues from affiliated
entities of $4,935,200, $4,698,311, and
$5,510,772 respectively (Note 9) .................... $ 38,211,521 $ 64,366,037 $ 85,841,117
Operating expenses:
Operating, including expenses from affiliated
entities of $7,909,110, $6,209,514 and
$6,378,115, respectively (Note 9) ................ 27,179,680 43,165,239 54,402,882
Selling and marketing ............................... 5,412,494 6,438,099 10,231,254
General and administrative .......................... 1,116,465 1,942,309 2,502,796
Depreciation and amortization ....................... 6,266,138 10,775,858 14,346,080
------------ ------------ ------------
Total operating expenses .......................... 39,974,777 62,321,505 81,483,012
------------ ------------ ------------
Operating income (loss) ................................ (1,763,256) 2,044,532 4,358,105
OTHER (INCOME) EXPENSE:
Interest expense (Note 10) .......................... 8,971,139 12,750,540 12,535,938
Interest income ..................................... (775,735) (1,021,214) (1,044,735)
Write-off of deferred offering costs (Note 2) ....... -- -- 725,128
Equity income (loss) of subsidiaries ................ 57,322 (106,175) (2,225)
Other expense (income) .............................. 1,171,264 73,821 (140,073)
------------ ------------ ------------
Total other expense, net ......................... 9,423,990 11,696,972 12,074,033
------------ ------------ ------------
LOSS BEFORE INCOME TAXES AND
MINORITY INTEREST ................................... (11,187,246) (9,652,440) (7,715,928)
Income tax provision (benefit) (Notes 2 and 15) ..... 48,531 (470,257) 124,757
------------ ------------ ------------
LOSS BEFORE MINORITY INTEREST .......................... (11,235,777) (9,182,183) (7,840,685)
Minority interest in net income of
consolidated subsidiaries ........................ 214,693 880,648 1,074,718
------------ ------------ ------------
NET LOSS ............................................... $(11,450,470) $(10,062,831) $ (8,915,403)
============ ============ ============

OTHER COMPREHENSIVE LOSS (INCOME) ...................... (8,456) 34,108 (23,353)
------------ ------------ ------------
COMPREHENSIVE LOSS (INCOME) ............................ $(11,442,014) $(10,096,939) $ (8,892,050)
============ ============ ============
NET LOSS PER COMMON SHARE:
Basic ............................................... $ (1.71) $ (1.32) $ (1.16)
============ ============ ============
Fully diluted ....................................... $ (1.71) $ (1.32) $ (1.17)
============ ============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic ............................................... 6,715,805 7,617,926 7,665,843
============ ============ ============
Fully diluted ....................................... 6,702,010 7,601,868 7,613,955
============ ============ ============

The accompanying notes are an integral part of these consolidated financial
statements.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

Series A Class A Class B
Preferred Stock Common Stock Common Stock
Shares Amount Shares Amount Shares Amount
--------- ----------- --------- ------- --------- -------

Balance, December 31, 1997 ......... -- $ -- 3,726,193 $37,262 2,231,400 $22,314

Conversion of Jones Global
Group note ....................... -- -- 833,334 8,333 -- --
Issuance of Class A
Common Stock ..................... -- -- 692,982 6,930 -- --
Other Comprehensive income, net of
tax:
Changes in unrealized
gains (losses) in securities ... -- -- -- -- -- --
Net loss ........................... -- -- -- -- -- --
--------- ----------- --------- ------- --------- -------
Balance, December 31, 1998 ......... -- -- 5,252,509 52,525 2,231,400 22,314
Issuance of Series A
Preferred Stock .................. 1,918,000 23,975,000 -- -- -- --
Issuance of Class A
Common Stock ..................... -- -- 16,012 160 -- --
Other comprehensive loss,
net of tax:
Changes in unrealized
gains (losses) in securities ... -- -- -- -- -- --
Net Loss ........................... -- -- -- -- -- --
--------- ----------- --------- ------- --------- -------
Balance, December 31, 1999 ......... 1,918,000 23,975,000 5,268,521 52,685 2,231,400 22,314
Issuance of Class A
Common Stock ..................... -- -- 60,942 610 -- --
Other comprehensive
income, net of tax:
Changes in unrealized
gains (losses) in securities ... -- -- -- -- -- --
Net Loss ........................... -- -- -- -- -- --
--------- ----------- --------- ------- --------- -------
Balance, December 31, 2000 ......... 1,918,000 $23,975,000 5,329,463 $53,295 2,231,400 $22,314
========= =========== ========= ======= ========= =======

Total
Additional Shareholders'
Paid-in Accumulated Comprehensive Equity
Capital Deficit Income (Loss) (Deficit)
----------- ------------ ------------- ------------

Balance, December 31, 1997 ......... $ 9,131,460 $(27,397,481) $ -- $(18,206,445)

Conversion of Jones Global
Group note ....................... 9,991,667 -- -- 10,000,000
Issuance of Class A
Common Stock ..................... 8,308,860 -- -- 8,315,790
Other Comprehensive income, net of
tax:
Changes in unrealized
gains (losses) in securities ... -- -- 8,456 8,456
Net loss ........................... -- (11,450,470) -- (11,450,470)
----------- ------------ -------- ------------
Balance, December 31, 1998 ......... 27,431,987 (38,847,951) 8,456 (11,332,669)
Issuance of Series A
Preferred Stock .................. -- -- -- 23,975,000
Issuance of Class A
Common Stock ..................... 156,383 -- -- 156,543
Other comprehensive loss,
net of tax:
Changes in unrealized
gains (losses) in securities ... -- -- (34,108) (34,108)
Net Loss ........................... -- (10,062,831) -- (10,062,831)
----------- ------------ -------- ------------
Balance, December 31, 1999 ......... 27,588,370 (48,910,782) (25,652) 2,701,935
Issuance of Class A
Common Stock ..................... 865,066 -- -- 865,676
Other comprehensive
income, net of tax:
Changes in unrealized
gains (losses) in securities ... -- -- 23,353 23,353
Net Loss ........................... -- (8,915,403) -- (8,915,403)
----------- ------------ -------- ------------
Balance, December 31, 2000 ......... $28,453,436 $(57,826,185) $ (2,299) $ (5,324,439)
=========== ============ ======== ============

The accompanying notes are an integral part of these consolidated financial
statements.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year ended December 31,
---------------------------------------------------
1998 1999 2000
------------- ------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ................................................. $ (11,450,470) $(10,062,831) $ (8,915,403)
Adjustment to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization .......................... 6,266,138 10,775,858 14,346,080
Amortization of deferred financing costs ............... 245,700 714,377 775,352
Equity in loss (income) of subsidiaries ................ 57,322 (106,175) (2,225)
Distributions received ................................. 350,000 -- 405,992
Gain on distributions from affiliates .................. -- -- (142,650)
Write-off of deferred offering costs ................... -- -- 725,128
Minority interest in net income ....................... 214,693 880,648 1,074,718
Write-off of property and equipment .................... 3,599 246 65,380
Net change in assets and liabilities:
Increase in net receivables ............................ (4,134,681) (461,488) (1,942,140)
Decrease (increase) in receivables from affiliates ..... (238,777) (234,982) 473,759
Decrease (increase) in prepaid expenses
and other current assets ............................. 246,476 (164,443) (497,472)
Decrease (increase) in other assets ..................... (271,171) (140,984) 19,460
Increase in accounts payable ............................ 1,357,787 1,757,390 514,166
Increase (decrease) in producers' fee payable ........... 2,043,770 (614,524) 43,717
Increase (decrease) in accounts receivable/payable
from/to Jones International ........................ (8,437,143) (421,550) 614,481
Increase in interest payable ........................... 5,527,631 293,750 --
Increase (decrease) in deferred revenues ............... 738,709 556,892 (651,619)
Increase (decrease) in accrued liabilities and
other liabilities .................................... 233,806 (483,832) 866,626
Increase in customer deposits ............................ 181,904 109,425 19,326
------------- ------------ ------------
Net cash provided by (used in) operating activities .... (7,064,707) 2,397,777 7,792,676
------------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ..................... (2,257,832) (849,703) (3,455,489)
Sale of property and equipment ......................... 56,890 385 --
Cable programming distribution agreement payments ...... (3,064,354) (6,353,526) (3,281,877)
Purchases of intangible assets and programming ......... (295,314) (398,392) (814,854)
Purchase of MediaAmerica, Inc. ......................... (26,700,000) -- --
Purchase of Broadcast Programming ...................... -- (20,876,926) --
Purchase of available for sale securities .............. (2,760,190) (4,154,203) --
Proceeds from available for sale securities ............ -- -- 3,200,355
Proceeds from liquidation of partnerships .............. -- -- 15,000
------------- ------------ ------------
Net cash used in investing activities .................. (35,020,800) (32,632,365) (4,336,865)
------------- ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for financing and offering costs ............... (4,547,384) (240,859) (484,269)
Repayments of borrowings ............................... (23,259,000) -- --
Repayment of capital lease obligations ................. (28,757,208) -- --
Proceeds from borrowings ............................... 16,704,500 -- --
Proceeds from Senior Secured Notes ..................... 100,000,000 -- --
Proceeds from Series A Preferred Stock ................. -- 23,975,000 --
Distributions paid to minority interest ................ (1,118,557) (882,782) (1,341,993)
------------- ------------ ------------
Net cash provided by (used in)
financing activities ................................. 59,022,351 22,851,359 (1,826,262)
------------- ------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ............ 16,936,844 (7,383,229) 1,629,549

CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD ................................................ 3,717,169 20,654,013 13,270,784
------------- ------------ ------------
CASH AND CASH EQUIVALENTS, END
OF PERIOD ................................................ $ 20,654,013 $ 13,270,784 $ 14,900,333
============= ============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid ............................................... $ 3,443,508 $ 11,676,781 $ 11,750,000
============= ============ ============

Non-cash consideration paid for acquisitions ................ $ 5,372,644 $ 14,115 $ 671,865
============= ============ ============
Income taxes paid ........................................... $ -- $ 411,541 124,757
============= ============ ============
Issuance of Class A Common Stock for GAC equity agreement ... $ 1,213,488 $ 142,428 $ 97,296
============= ============ ============
Issuance of Class A Common Stock for the acquisition of
MediaAmerica, Inc. ........................................ $ 8,129,550 $ -- $ --
============= ============ ============
Conversion of Global Group note to Class A Common Stock ..... $ 10,000,000 $ -- $ --
============= ============ ============

The accompanying notes are an integral part of these consolidated financial
statements.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1998, 1999 AND 2000

(1) ORGANIZATION AND BUSINESS

Jones Media Networks, Ltd. (the "Company"),a Colorado corporation, was
incorporated in May 1998. The Company is the successor of several companies
which have been conducting business for a number of years. The Company was
formerly known as Jones International Networks, Ltd. In an effort to better
reflect the Company's core business focus, in December 2000, the Company changed
its name to Jones Media Networks, Ltd. The Company is a majority-owned
subsidiary of Jones International, Ltd. ("Jones International"), a holding
company with ownership in several companies involved in various industries.
Jones International is wholly owned by Mr. Jones, who is Chairman and Chief
Executive Officer of Jones International and various of its subsidiaries.

The Company owns and operates a network radio business and two cable
television networks. The Company creates, develops, acquires, produces and
syndicates programming that the Company distributes to radio stations, cable
television system operators and other video distributors. Through its radio and
cable television media, the Company aggregates and targets a nationwide
audience, thereby providing national advertisers with an efficient means to
reach their desired demographic groups. The Company also started an Internet
advertising sales business in 2000. The Company also provides satellite services
to facilitate the distribution of its programming and that of other companies.

VENTURES--The Company is a partner in the Product Information Network
Venture ("PIN Venture"). The PIN Venture commenced operations on February 1,
1995 and is a joint venture which is owned approximately 55 percent by the
Company and 45 percent by a third party. The PIN Venture owns and operates a
24-hour-a-day cable television network for the airing of long-form advertising
("infomercials"). Galactic/Tempo ("Superaudio") and Jones/Capstar LLC were also
joint ventures of the Company. Superaudio ceased distributing its programming
and all other operating activities on January 31, 2000. Jones Radio Network,
Inc., a wholly owned subsidiary of the Company, purchased all Jones/Capstar
assets on April 1, 2000 and now directs, produces and distributes its
programming.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS--The Company considers all highly liquid
investments with a maturity when purchased of three months or less to be cash
equivalents.

AVAILABLE FOR SALE SECURITIES--Available for sale marketable securities are
carried at fair value, with unrealized holding gains and losses reported as a
separate component of shareholders' equity deficit. The cost of securities sold
is determined using the first-in, first-out method. At December 31, 2000, the
Company held marketable securities available for sale with an aggregate cost of
approximately $3,714,000 and a net unrealized loss of approximately $2,000.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS--The fair value of the Company's
financial instruments is estimated based on the quoted market prices for similar
instruments. The carrying value of the Company's accounts receivable and cash
equivalents are assumed to approximate fair value due to the short-term nature
of these accounts (see Note 11).

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of all majority-owned and controlled subsidiaries. Investments in
entities which are not majority-owned and controlled by the Company are
accounted for under the equity method. All significant intercompany balances and
profits have been eliminated in consolidation.

MINORITY INTEREST--The minority interest in the net income or loss of the
Company's consolidated subsidiaries is reflected in the consolidated statements
of operations. To the extent the minority interest in the net losses of the
Company's consolidated subsidiaries exceeds the minority investment in those
subsidiaries, such excess losses are charged to the Company. No such excess
losses were incurred in 1998, 1999 or 2000.

PROPERTY AND EQUIPMENT--Property and equipment are depreciated using the
straight-line method over the estimated useful lives of 3 to 15 years. The
building is depreciated using the straight-line method over an estimated useful
life of 40 years. Leasehold improvements are amortized using the straight-line
method over the lesser of five years or the term of the lease. Satellite
transponders are depreciated using the straight-line method over the estimated
useful life of 12 years.

GOODWILL--Goodwill consists primarily of the excess purchase price paid in
the PIN Venture acquisition in 1997, the excess purchase price paid in the
MediaAmerica acquisition in 1998 (see Note 5) and the excess purchase price paid
in the Broadcast Programming acquisition in 1999 (see Note 6). Goodwill related
to the PIN Venture, and the MediaAmerica and Broadcast Programming acquisitions
is amortized using the straight-line method over their estimated economic lives,
which are 18 years, 40 years and 20 years, respectively.

INTANGIBLE ASSETS--Intangible assets consist primarily of radio programming
licensing agreements, cable programming distribution agreement payments,
personal service agreements and investment in programming. Radio programming
licensing agreements and cable programming distribution agreement payments are
amortized using the straight-line method over the lesser of 15 years or over the
period during which a portion of such payments is refundable. Personal service
agreements are amortized using the straight-line method over the terms of the
agreements. Investment in programming is amortized using the straight-line
method over the estimated useful life of each program.

LONG-LIVED ASSETS--The Company reviews for the impairment of long-lived
assets and certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company has identified no such impairment indicators for the
years ended December 31, 1998 and 2000. In 1999, the Company wrote off
approximately $802,000 of capitalized costs

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

for programs that were no longer distributed. This impairment was recorded in
depreciation and amortization expenses in the accompanying consolidated
statements of operations.

DEFERRED COMMISSIONS--Sales commissions are included in other assets and
are amortized using the straight-line method over the life of the corresponding
affiliate agreements from which the sales commission was paid. The current
amount represents the portion to be amortized within the next 12 months.

DEFERRED EQUITY OFFERING COSTS--In late 1999 and early 2000, the Company
incurred approximately $725,000 in equity offering costs related primarily to
financial advisory, legal and accounting fees in connection with an attempted
initial public offering of the Company's Class A Common Stock. As a result of
the Company's withdrawal of this equity offering, the Company has expensed all
deferred equity offering costs relating to this equity offering. All such costs
were expensed in the third quarter of 2000.

DEFERRED FINANCING COSTS--In 1998, the Company incurred approximately
$4,526,000 of debt offering costs related primarily to financial advisory
services, legal counsel, independent public accountants, regulatory and stock
exchange registration fees and other various costs associated with the Notes
offering. Deferred financing costs are amortized to interest expense over the
term of the Notes.

CUSTOMER DEPOSITS AND DEFERRED REVENUES--Customer deposits consist of
unearned revenues associated with affiliate fees and refundable advance payments
that are recognized as income as the related advertising is aired. Deferred
revenues consist of advance payments and a security deposit paid by a lessee of
the Company's satellite transponder.

INCOME TAXES--Prior to April 2, 1997, the Company joined with Jones
International in filing a consolidated Federal tax return as provided for under
the terms of a tax allocation agreement with Jones International. As a result of
the issuance of additional shares of the Company's common stock, less than 80
percent of the Company's outstanding common stock was beneficially owned by
Jones International as of April 2, 1997. Therefore, the Company is no longer
joined with Jones International in filing a consolidated Federal tax return.
However, the Company continues to file combined state tax returns with Jones
International in certain states as provided for under the terms of the tax
allocation agreement (see Note 15).

The tax allocation agreement with Jones International gave Jones
International the option to either make a payment of the tax benefits due to the
subsidiary members of the tax sharing group or to defer such payments until a
subsequent taxable period in which the subsidiary member generated taxable
income and had a tax payment due either to Jones International or to a state
taxing authority. Jones International could defer such payments for a period not
to exceed five years from the date the tax return was filed and could accrue
interest at the time the deferred benefit amounts originated. For the year ended
December 31, 1998, the Company recorded a tax provision of approximately $49,000
to adjust estimated tax provisions to actual tax provisions for the year ended
December 31, 1997. In 1999, Jones International elected to make a $1,293,000
payment of state tax benefit through a reduction of the intercompany balance due
Jones International from the Company. As of December 31, 1999, the Company
recorded a state tax benefit of approximately $879,000.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Jones International elected to pay this benefit through a reduction of the
intercompany balance between the Company and Jones International in 1999.

The Company accounts for deferred tax liabilities or assets based on the
temporary differences between the financial reporting and tax bases of assets
and liabilities as measured by the enacted tax rates which are expected to be in
effect when these differences reverse. Deferred tax assets are reduced, if
deemed necessary, by a valuation allowance for the amount of any tax benefits
which, based upon current circumstances, are not expected to be realized.

REVENUE RECOGNITION--The Company's revenues are comprised of network radio
revenues, cable television programming revenues, Internet advertising sales
services revenues and satellite services revenues.

In accordance with industry practice, network radio, cable television
programming and Internet advertising sales services revenues are recognized
based on the standard broadcast calendar that ends on the last Sunday of each
reporting period. The broadcast calendar for the calendar years ended December
31, 1997, 1998 and 1999 each had 52 weeks. The broadcast calendar for the year
ended December 31, 2000 had 53 weeks.

Network radio revenues consist primarily of advertising revenue, fees for
programming and services the Company provides to radio stations and to third
party producers, e-commerce revenues and other revenues generated by companion
websites of certain radio programs. The Company provides radio programming and
services to radio stations in exchange for commercial inventory that we resell
to national advertisers who market their product or services on the radio
network and the Company recognizes revenue upon airing the advertisements. In
addition, the Company generates advertising revenues by charging fees to third
party producers for certain advertising sales and affiliates sales services,
which are based on a percentage of related advertising revenue. Any amounts
received from customers for radio advertisements that have not been aired during
the period are recorded as deferred revenues until such time as the
advertisement is aired. Radio station license fees are earned monthly from
certain stations based on the radio station's contractual agreement.

Cable television programming revenues include advertising, license fees and
e-commerce revenues. The Company generates television advertising revenues by
selling airtime to advertisers who advertise their products or services on the
networks. The Company recognizes advertising revenues upon the airing of the
advertisements. Any amounts received from customers for television
advertisements that have not been aired during the period are recorded as
deferred revenues until such time as the advertisement is aired. The Company
delivers its programming to cable television systems for distribution to their
viewers. Cable television system license fees are earned monthly based on a per
subscriber fee set under the terms of the cable operator's contractual agreement
and the number of subscribers that are receiving the Company's programming
during the respective month.

In January 2000, the Company began developing an Internet advertising sales
services business which sells national streaming media advertising for third
parties. Internet advertising sales services revenues

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

includes advertising revenues generated by charging fees for selling national
advertisements. Fees charged in this business are generally based on a
percentage of the advertising revenues generated for third parties. The Company
recognizes the advertising revenues upon airing of the advertisements. Any fees
received from third parties for advertisements that have not been aired during
the period are recorded as deferred revenues until such time as the
advertisement is aired.

Satellite services revenues include revenues from satellite delivery,
uplinking, trafficking, playback and other earth station services. The Company
generates revenues by providing such services to affiliates and third parties.
The Company recognizes satellite delivery and production support revenues upon
completion of the services or upon contractual arrangements.

USE OF ESTIMATES--The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires the
Company to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

RECLASSIFICATION--Certain prior period amounts have been reclassified to
conform to the current year presentation.

NEW ACCOUNTING PRONOUNCEMENTS--In June 1998, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standard No.
133, "Accounting for Derivatives and Hedging Activities" ("SFAS 133"). SFAS 133
was to be effective for all fiscal quarters of fiscal years beginning after June
15, 1999. SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. In July 1999, SFAS No. 137, "Accounting
for Derivative Instruments and Hedging Activities--Deferral of the Effective
Date of FASB Statement No. 133" ("SFAS 137") was issued. SFAS 137 deferred the
effective date of SFAS 133 until fiscal years beginning after June 15, 2000. In
June 2000, SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an Amendment of FASB Statement No. 133" ("SFAS
138") was issued. SFAS 138 addresses a limited number of issues causing
difficulties in the implementation of SFAS 133 and is required to be adopted
concurrent with SFAS 133. The Company has not engaged in hedging activities and
does not believe that the adoption of SFAS 133 and SFAS 138 will have a material
impact on the Company's financial position or results of operations.

In September 2000, the FASB issued Statement No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities -
a Replacement of FASB Statement No. 125" ("SFAS 140"). SFAS 140 replaces FASB
Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" and revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures. Among other requirements, SFAS 140 requires a
debtor to (a) reclassify financial assets pledged as collateral and report those
assets in its statement of financial position separately from other assets not
so encumbered if the secured party has the right by contract or custom to sell
or repledge the collateral and (b) disclose assets pledged as collateral that

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

have not been reclassified and separately reported in the statement of financial
position. SFAS 140 is effective for financial statements for fiscal years ending
after December 15, 2000. The Company adopted SFAS 140 for the year ending
December 31, 2000, the results of which did not have a material impact on the
financial statements or notes thereto.

(3) PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

December 31,
1999 2000
------------ ------------

Land ....................................................... $ 1,395,592 $ 1,395,592
Building ................................................... 2,321,463 2,321,463
Satellite transponders ..................................... 35,680,188 35,680,188
Furniture, fixtures and equipment .......................... 13,705,620 16,913,682
Leasehold improvements ..................................... 788,647 805,989
------------ ------------
Total property and equipment .......................... 53,891,510 57,116,914
Less accumulated depreciation and amortization ... (30,932,406) (36,283,921)
------------ ------------
Net property and equipment ............................ $ 22,959,104 $ 20,832,993
============ ============

(4) INTANGIBLE ASSETS

Intangible assets consist of the following:

December 31,
1999 2000
------------ ------------

Goodwill ............................................ $ 34,164,797 $ 35,252,078
Cable programming distribution agreement payments ... 12,654,846 14,295,739
Personal service and consulting agreements .......... 11,876,218 12,663,482
Investment in programming ........................... 2,004,344 2,195,244
Other ............................................... 9,914,104 10,519,953
------------ ------------
Total intangibles .............................. 70,614,309 74,926,496
Less accumulated amortization ............. (6,972,039) (15,104,008)
------------ ------------
Net intangibles ................................ $ 63,642,270 $ 59,822,488
============ ============

(5) ACQUISITION OF MEDIAAMERICA

On July 10, 1998, the Company acquired substantially all assets and
assumed certain liabilities of MediaAmerica for $32.7 million plus a working
capital adjustment of approximately $2.1 million. MediaAmerica provided
advertising sales services and also owned syndicated radio programming. The
seller of MediaAmerica received $26.7 million in cash and $8.1 million in
shares of Class A Common Stock of the Company valued at $12 per share, which
included 177,464 and 1,176 shares of Class A Common Stock for a working
capital adjustment in 1998 and 1999, respectively. There are no further
working capital adjustments. The acquisition was accounted for as a purchase.
The Company recorded approximately $29.8 million in goodwill in connection
with the acquisition of MediaAmerica.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The seller of MediaAmerica has the right to cause the Company to repurchase
the shares of the Company issued in the MediaAmerica acquisition at any time
after three years from the July 10, 1998 closing. The price would be the fair
market value of the Class A Common Stock on the date of exercise of the put, as
determined by agreement or by an independent investment banking firm. The
Company has a correlative right to require that the seller of MediaAmerica to
sell such shares to the Company at fair market value. Such rights terminate upon
an initial public offering by the Company. Before the seller can require the
Company to buy its shares, the Company must have available cash (as defined);
this condition lapses after seven and one quarter years from the date of
closing. If the Company has exercised its purchase right and there is a change
of control involving a higher price within nine months of the exercise of the
call, the Company must pay specified additional consideration.

Certain unaudited condensed pro-forma financial information of the Company
assuming the purchase noted above was completed as of January 1, 1998, is as
follows:

For the Year Ended
December 31,
1998
------------

Revenues ..................... $ 44,564,000
Operating expenses ........... 46,131,000
Operating income (loss) ...... (1,567,000)
Net loss ..................... (14,393,000)
Net loss per common share .... $ (1.92)

(6) ACQUISITION OF BROADCAST PROGRAMMING

On August 2, 1999, the Company acquired certain radio programming assets
from Broadcast Electronics, Inc. ("BEI"), a Rhode Island corporation, for $20
million plus estimated closing adjustments of approximately $860,000, in cash
(the "BP Acquisition"). BEI's radio programming business was conducted through
its Broadcast Programming Division ("BP"), which included the following
programs: Delilah, Lia, and TotalRadio music format services. The Company
recorded approximately $1.0 million in goodwill and $18.6 million in affiliate
and personal service agreements in connection with the BP Acquisition. The
affiliate and personal service agreements are recorded as intangible assets.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) CREDIT FACILITY

On July 29, 1999, the Company entered into a $20 million credit facility
with a commercial bank to finance the BP Acquisition on a short-term basis (the
"Credit Facility"). In order to allow the Company to obtain more favorable
terms, Jones International had guaranteed the loan and provided certain
collateral as security for the guaranty. The Credit Facility bore interest
either at the commercial bank's prime rate minus two percent or a fixed rate
(which is approximately equal to LIBOR) plus one half of one percent. The
interest rate was 6.5% per annum as of December 31, 1999. On September 30, 1999,
the Company used the proceeds from the sale of shares of its Series A Preferred
Stock to pay down all amounts outstanding under the Credit Facility (see Note
8). The Credit Facility expired on June 30, 2000.

(8) SERIES A PREFERRED STOCK

In 1999, the Company issued $24.0 million of Series A Preferred Stock. The
Company used $20.0 million of the proceeds from the Series A Preferred Stock
issuance to repay $20.0 million of indebtedness under the Company's $20.0
million Credit Facility. The balance was used to develop and enhance the
Company's radio and cable television websites.

The holders of the Series A Preferred Stock are entitled to receive
dividends if and when declared by the Board of Directors. No dividends will be
paid on Class A or Class B Common Stock unless equal dividends have been
declared and paid on the Series A Preferred Stock. Shareholders will have the
right to convert at any time the Series A Preferred Stock into shares of Class A
Common Stock of the Company, on a one-for-one basis. The Series A Preferred
Stock will be automatically converted into Class A Common Stock of the Company
upon the completion by the Company of a public offering or a series of public
offerings raising aggregate gross proceeds of at least $20 million.

(9) TRANSACTIONS WITH RELATED PARTIES

The Company is a subsidiary of Jones International, a holding company with
ownership in several companies involved in various industries. Jones
International is wholly owned by Mr. Jones, who is Chairman and Chief Executive
Officer of Jones International and various of its subsidiaries. Certain members
of management of the Company are also officers or directors of these affiliated
entities and, from time to time, the Company may have transactions with these
entities. Certain expenses are paid by affiliated entities on behalf of the
Company and are allocated at cost based on specific identification or other
methods which management believes are reasonable. Recurring transactions with
affiliates are described below.

REVENUES--The Company earned up to a three percent commission on the sale
of infomercial airtime for an affiliated network. As a result of this affiliated
network ceasing its distribution efforts in the last quarter of 1999, this
service was terminated in September 1999. For the years ended December 31, 1998
and 1999, the Company received approximately $176,000 and $114,000,
respectively, for this service.

The Company distributes Great American Country to certain cable television
systems owned or managed by Jones Intercable, Inc. ("Jones Intercable").
Effective April 7, 1999, Jones Intercable is no longer an

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

affiliate of the Company due to the sale of Mr. Jones' interest in Intercable.
Jones Intercable, through its new unaffiliated parent, has continued to pay the
Company programming license fees subsequent to the sale of Mr. Jones' interest
in Jones Intercable. Jones Intercable and its affiliated partnerships paid total
license fees to the Company of approximately $921,000 for the year ended
December 31, 1998. From January 1, 1999 to April 7, 1999, Jones Intercable and
its affiliated partnerships paid total affiliated fees to the Company of
approximately $322,000 for this programming service.

Jones Earth Segment, Inc. ("Earth Segment"), a wholly owned subsidiary of
the Company, provides playback, editing, duplication, trafficking and uplinking
services to its cable programming network affiliates and to third parties. Earth
Segment charges affiliates for its services using rates which are calculated to
achieve a specified rate of return on its investment. For the years ended
December 31, 1998, 1999 and 2000, Earth Segment charged the related party and
its affiliates approximately $2,664,000, $2,787,000 and $2,029,000,
respectively, for these services. An affiliated entity terminated its use of
certain earth station services provided by Earth Segment in 2000. As a result,
the Company received a one-time payment of approximately $1,553,000 in
connection with the termination of certain earth station agreements with this
affiliated entity.

In addition, Jones Space Holdings ("Space Holdings"), a subsidiary of the
Company, subleases a non-preemptible satellite transponder to an affiliated
entity. Satellite transponder lease revenues of approximately $1,174,000,
$1,475,000 and $1,540,000, were received from this related party and its
affiliates for the years ended December 31, 1998, 1999, and 2000, respectively.
An affiliated entity terminated one of its satellite transponder agreements with
Space Holdings. As a result, the Company received a one-time payment of
approximately $388,000 in connection with the termination of the satellite
transponder agreement with this affiliated entity.

OPERATING EXPENSES--The PIN Venture pays a significant portion of the
revenues generated by its infomercial programming in the form of system rebates
to all cable systems which enter into agreements to air such programming.
Effective December 31, 1998, the Company acquired the remaining Adelphia
Communications equity interest in the PIN Venture in exchange for 15,520 shares
of the Company's Class A Common Stock. As a result, Adelphia Communications is
no longer an affiliated party of the PIN Venture as of January 1, 1999. The PIN
Venture paid Jones Intercable and its affiliated partnerships, Cox
Communications and Adelphia Communications approximately $5,216,000 for the year
ended December 31, 1998 for system rebates. Effective April 7, 1999 Jones
Intercable is no longer an affiliate of the Company due to the sale of Mr.
Jones' interest in Jones Intercable. The PIN Venture has continued to pay
rebates to Jones Intercable (and its affiliated partnerships) and Adelphia
Communications subsequent to the change in the ownership structures. From
January 1, 1999 to April 7, 1999, the PIN Venture paid Jones Intercable (and its
affiliated partnerships) approximately $417,000 for system rebates. The PIN
Venture paid Cox Communications approximately $3,116,000 and $3,776,000 for the
years ended December 31, 1999 and 2000, respectively, for system rebates.

Jones Network Sales ("JNS"), a wholly owned subsidiary of Jones
International, provides affiliate sales and certain marketing services to the
Company. As a result of an affiliated entity ceasing operations, such

affiliate sales and marketing functions were incorporated into operations of the
Company effective in January 2000. This affiliate charged the Company
approximately $906,000 and $1,418,000 for the years ended December 31, 1998 and
1999, respectively, for these services.

Jones Galactic Radio, Inc. ("Galactic Radio"), a wholly-owned subsidiary of
the Company, had a transponder lease agreement with Jones Satellite Holdings
("Satellite Holdings"), an affiliate of the Company, for the use of the
sub-carriers on a non-preemptible satellite transponder. This agreement allowed
Galactic Radio to use a portion of the transponder to distribute its audio
programming. Galactic Radio elected to terminate this agreement on January 31,
2000. Satellite Holdings charged $696,000, $696,000 and $58,000 for the years
ended December 31, 1998, 1999 and 2000, for this service.

The Company leases and subleases office space in Englewood, Colorado from
affiliates of Jones International. The Company was charged approximately
$148,000, $226,000 and $471,000, for the years ended December 31, 1998, 1999 and
2000, respectively, for rent and associated expenses.

An affiliate of Jones International provides computer hardware and software
support services to the Company. This affiliate charged the Company
approximately $733,000, $787,000 and $1,260,000, for the years ended December
31, 1998, 1999 and 2000, respectively, for such services.

An affiliate of the Company charged the Company approximately $197,000,
$33,000 and $11,000 for the years ended December 31, 1998, 1999 and 2000 for the
allocated costs of its airplane which was used by the Company in connection with
its debt and equity offerings efforts.

The Company and its consolidated subsidiaries reimburse Jones International
and its affiliates for certain allocated administrative expenses such as legal,
human resources and tax services. These expenses generally consist of payroll
and related benefits. Allocations of personnel costs are generally based on
actual time spent by affiliated associates with respect to the Company. Jones
International and its affiliates charged the Company approximately $1,116,000,
$968,000 and $813,000, for the years ended December 31, 1998, 1999 and 2000,
respectively, for these administrative expenses.

To assist in funding its operating and investing activities, the Company
had borrowed funds from Jones International. Jones International charged the
Company interest of approximately $506,000 and $38,000, for the years ended
December 31, 1998 and 1999, respectively. The Company repaid these advances from
borrowings, operating cash flow and/or available cash balances.

In the normal course of business, Jones International (1) remits funds on
behalf of the Company to third parties and affiliates in payment for products
and services purchased by the Company, and (2) receives funds on behalf of the
Company in payment for products and services provided by the Company. Effective
in April 1999, these amounts are reimbursed from or to Jones International on a
monthly basis and no interest is charged on the outstanding balance. Outstanding
payables to Jones International and related parties at December 31, 2000 were
approximately $0.2 million.

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(10) SENIOR SECURED NOTES

In July 1998, the Company issued $100 million of 11 3/4 percent Senior
Secured Notes (the "Notes"). Interest on the Notes is payable semi-annually on
January 1 and July 1 of each year, commencing January 1, 1999. The Notes will
mature on July 1, 2005. Except as described below, the Company may not redeem
the Notes prior to July 1, 2003. On or after such date, the Company may redeem
the Notes, in whole or in part, at any time, at a redemption price of 105.875
percent of the principal amount to be redeemed for the 12 month period
commencing July 1, 2003 and declining to 100 percent of the principal amount to
be redeemed for the period after July 1, 2004, together with accrued and unpaid
interest, if any, to the date of redemption. In addition, at any time and from
time to time on or prior to July 1, 2001, the Company may, subject to certain
requirements, redeem up to 35 percent of the aggregate principal amount of the
Notes with the cash proceeds of one or more Equity Offerings (as defined) at a
redemption price equal to 111.75 percent of the principal amount to be redeemed,
together with accrued and unpaid interest, if any, to the date of redemption,
provided that at least 65 percent of the aggregate principal amount of the Notes
remains outstanding immediately after each such redemption. Upon the occurrence
of a Change of Control (as defined), the Company will be required to make an
offer to repurchase the Notes at a price equal to 101 percent of the principal
amount thereof, together with accrued and unpaid interest, if any, to the date
of repurchase.

The Notes are senior obligations of the Company. The Notes are secured by
the capital stock of JPN, Inc., the Company's wholly owned intermediate holding
company and JPN's direct subsidiaries. The Notes are unconditionally guaranteed
(the "Guarantees") by each of the Subsidiary Guarantors (as defined). The
Guarantees are senior obligations of the Subsidiary Guarantors and rank pari
passu in right of payment with all existing and future Senior Indebtedness of
the Subsidiary Guarantors, other than Bank Indebtedness (as defined) and
Capitalized Lease Obligations (as defined) of the Subsidiary Guarantors, and are
ranked senior in right of payment to all existing and future Subordinated
Obligations of the Subsidiary Guarantors. The Guarantees are not secured.

(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

SENIOR SECURED NOTES - The fair value of the Notes was estimated based on
the quoted market prices for the Notes.

CLASS A COMMON STOCK SUBJECT TO PUT - The fair value of the Company's Class
A Common Stock subject to put is estimated based on the estimated purchase price
to buy back the Class A Common Stock (see Note 17).

The estimated fair values of the Company's financial instruments are as follows:

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31,
-----------------------------------------------------------------
1999 2000
------------------------------ -----------------------------
Carry Fair Carry Fair
Amount Value Amount Value
------------ ------------ ------------ -----------

Senior Secured Notes .................. $100,000,000 $101,500,000 $100,000,000 $95,000,000
Class A Common Stock subject to put ... 1,213,000 1,021,000 1,311,000 951,000

(12) COMMON STOCK

VOTING RIGHTS--Holders of Class A Common Stock are generally entitled to
one vote per share and are entitled to elect 25% of the Board of Directors, and
holders of Class B Common Stock are entitled to ten votes per share and to elect
the remaining 75% of the Board of Directors. Both classes vote together as a
single class on all matters not requiring a class vote under Colorado law.

STOCK SPLIT--The Board of Directors approved a 5 for 4 forward stock split
with respect to the shares of the Company's Class A and Class B Common Stock.
This stock split has been reflected retroactively in the accompanying
consolidated financial statements.

(13) STOCK OPTIONS

The Company has adopted an employee stock option plan (the "Plan") that
provides for the grant of stock options and stock appreciation rights ("SARs")
to employees of the Company. The Plan is construed, interpreted and administered
by the Board of Directors or a committee of two of more non-employee directors.
The committee or the Board of Directors determines the individuals to whom
options are granted, the number of shares subject to the options, the exercise
price of the options, the period over which the options become exercisable and
the terms and provisions of stock options as it may determine from time to time,
subject only to the provisions of the Plan. The Plan (as amended) covers an
aggregate of up to 1,750,000 shares of the Company's Class A Common Stock. As of
December 31, 2000, options to purchase 1,015,000 shares of Class A Common Stock
have been granted and 141,250 shares have been terminated or forfeited upon
resignation of the holders. The options outstanding at December 31, 2000 have an
exercise price of $12 per share and a weighted average remaining contractual
life of 8.73 years. At December 31, 2000, options of 149,063 shares were
exercisable.

The Company accounts for this plan under Accounting Principles Board
("APB") Opinion No. 25, under which no compensation has been recognized. Had
compensation cost for this plan been determined consistent with SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company's net loss and basic and
diluted earnings per share would have been reduced to the pro forma amounts
indicated below

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Year Ended December 31,
----------------------------------
1999 2000
------------- ------------

Net loss As reported $ (10,063,000) $ (8,915,000)
Pro forma (10,375,000) (9,445,000)
Basic loss per share As reported $ (1.32) $ (1.16)
Pro forma (1.36) (1.23)
Diluted loss per share As reported $ (1.32) $ (1.17)
Pro forma (1.36) (1.24)

The fair value of each of the option granted is estimated on the date of
grant using the Black-Scholes option pricing model with the following
weighted-average assumptions used for grants in 1999: risk-free interest rates
of 5.26 percent, an expected life of 7 years and expected volatility of 60%.
Assumptions used for grants in 2000: risk-free interest rates at 5.16 percent,
an expected life of 7 years and expected volatility of 60%.

(14) NET LOSS PER COMMON SHARE

In February 1997, FASB issued SFAS No. 128, "Earnings Per Share." This
statement replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is similar to
the previously reported fully diluted earnings per share.

Basic and diluted weighted average shares amounts for all periods are
presented below in accordance with the requirements of SFAS No. 128.

1998 1999 2000
--------- --------- ---------

Weighted average shares for basic EPS ..... 6,715,805 7,617,926 7,665,843

Less: Shares subject to put ............... 13,795 16,058 51,888

Weighted average shares for diluted EPS ... 6,702,010 7,601,868 7,613,955

(15) INCOME TAXES

As described in Note 2, the Company joined in filing a consolidated Federal
tax return as provided for under the terms of a tax sharing agreement with Jones
International and Jones International's other subsidiaries through the first
quarter of 1997. Subsequent to the first quarter of 1997, the Company continues
to join in filing certain combined state tax returns with Jones International in
accordance with the tax sharing agreement. However, the Company does not file
combined or consolidated tax returns for all states. Thus, certain subsidiaries
incur tax liabilities in a number of states. Pursuant to the terms of the

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

agreement, tax (provisions) benefits are allocated to members of the tax sharing
group based on their respective pro rata contribution of taxable income (loss)
to Jones International's combined taxable income (loss). For the year ended
December 31, 1998, the Company recorded a Federal tax provision of approximately
$49,000 to adjust estimated tax provisions to actual tax provisions for the year
ended December 31, 1997. For the year ended December 31, 1999, the Company
recognized a state tax benefit of approximately $879,000 as a result of the tax
sharing arrangement with Jones International. For the year ended December 31,
2000, no state tax benefit (provision) was recognized as a result of the tax
sharing arrangement with Jones International.

The difference between the statutory federal income tax rate and effective
rate is summarized as follows:

Year Ended December 31,
-----------------------------------------------
1998 1999 2000
----------- ----------- -----------

Computed "expected tax benefit" .............................. $ 3,991,000 $ 3,332,000 $ 2,701,000
State taxes, net of federal benefit .......................... 371,000 294,000 251,000
Minority interest in net loss ................................ -- -- 411,000
Other ........................................................ (35,000) (43,000) (65,000)
----------- ----------- -----------
Total ..................................................... 4,327,000 3,583,000 3,298,000
Valuation allowance .......................................... (4,327,000) (3,583,000) (3,298,000)
----------- ----------- -----------
Tax benefit (provision) before impact of tax sharing
agreement ................................................. -- -- --
Tax provision for subsidiaries filing state tax returns on
separate company basis .................................... -- (409,000) (125,000)
Impact of tax sharing agreement .............................. (49,000) 879,000 --
----------- ----------- -----------
Total income tax benefit (provision) ......................... $ (49,000) $ 470,000 $ (125,000)
=========== =========== ===========

The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities are as follows:

December 31,
1999 2000
------------ ------------

DEFERRED TAX ASSETS:
Net operating loss carry forwards ....................................... $ 7,752,000 $ 10,092,000
Future deductible amounts associated with other assets and liabilities .. 4,665,000 4,262,000
------------ ------------
Total ............................................................. 12,417,000 $ 14,354,000
DEFERRED TAX LIABILITIES:
Net assets of MediaAmerica .............................................. (330,000) (406,000)
Property and equipment .................................................. (337,000) (1,236,000)
Valuation allowance ..................................................... (11,750,000) $(12,712,000)
------------ ------------
Net deferred tax assets ................................................. $ -- $ --
============ ============

At December 31, 2000, the Company had net tax operating loss carryforwards
("NOLs") of approximately $25.7 million which will expire between 2013 and 2021.
In addition, the Company had net capital loss carryforwards of approximately
$0.7 million at December 31, 2000, which will expire in 2006. Although
management expects future results of operations to improve, it recognizes the
Company's past performance rather than growth projections when determining the
valuation allowance. Any subsequent

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

adjustment to the valuation allowance, if deemed appropriate due to changed
circumstances, will be recognized as a separate component of the provision for
income taxes.

(16) EMPLOYEE INVESTMENT AND DEFERRED COMPENSATION PLANS

The Company's employees are eligible to participate in an Employee Profit
Sharing/Retirement Savings Plan (the "401(k) Plan"). Under the 401(k) Plan,
eligible employees are permitted to defer up to 16% of their annual
compensation. The Company currently matches 50% of the employees' deferrals up
to a maximum of 6% of their annual compensation, with the Company's contribution
vesting immediately. Contributions to the 401(k) Plan are invested by the
trustees of the 401(k) Plan in accordance with the directions of each
participant. Participants or their beneficiaries are entitled to payment of
benefits (i) upon retirement either at or after age 65, (ii) upon death or
disability or (iii) upon termination of employment, unless the participant
elects to receive payment prior to one of the events previously listed. For the
years ended December 31, 1998, 1999 and 2000, the Company contributed
approximately $99,000, $262,000 and $447,000, respectively, to the 401(k) Plan
on behalf of its employees.

Certain of the Company's key management personnel are eligible to
participate in a Deferred Compensation Plan (the "Deferred Compensation Plan").
Under the Deferred Compensation Plan, key employees are permitted to defer
receipt of 100% of their annual compensation. The Company currently matches the
key employees' deferrals up to a maximum of 6% of their compensation. The
contributed funds are deposited with an independent trustee and are invested in
a number of pre-selected investment funds. Both the key employees' and the
Company's contributions are subject to the claims of the Company's creditors.
Participants in the Deferred Compensation Plan or their beneficiaries receive a
distribution of their contributions, the Company's contributions, and earnings
attributable to those contributions on their separation from employment with the
Company or their death. Contributions made by the Company to the Deferred
Compensation Plan on behalf of key employees totaled approximately $33,000,
$110,000 and $98,000 for the years ended December 31, 1998, 1999 and 2000,
respectively.

(17) COMMITMENTS AND CONTINGENCIES

GAC EQUITY AGREEMENT--In 1998, Great American Country and the Company
entered into an equity affiliate agreement with a multiple cable system operator
("MSO"). Pursuant to the terms of the agreement, the Company agreed to issue
shares of Class A Common Stock to this MSO in return for this MSOs providing
Great American Country's programming to no less than 550,000 of their
subscribers by May 31, 1998 and an additional 150,000 subscribers by December
31, 1999. The total number of shares of Class A Common Stock issued was based on
the number of subscribers provided by this MSO. As of December 31, 2000, 136,540
shares of Class A Common Stock had been issued. No additional shares of Class A
Common Stock are required to be issued to this MSO. The value of the Class A
Common Stock was recorded as an intangible asset upon execution of the affiliate
agreements and upon issuance of the Class A Common Stock. This intangible is
being amortized using the straight-line method over the life of the contract
(approximately 10 years). Because of a put option granted to this MSO, the
shares issued to this MSO are presented above the Shareholders' Deficit section
of the Statements of Financial Position. The

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

amount of accretion from the value of the shares issued to the put option at the
exercise date is not significant.

As noted above, this MSO was granted a put option on the Class A Common
Stock issued, whereby, if as of December 31, 2001, the Company or its successor
has not completed a public offering of its securities, the MSO would have the
option within 60 days of such date to require the Company to buy back its Class
A Common Stock at a price equal to all or a portion of the license fees that
would have been paid during the period between the date of the agreement and the
exercise date of the put option. The purchase price would be based on the total
number of MSO subscribers receiving the Great American Country service as of
December 31, 1999. Based on the number of subscribers receiving the Great
American Country service at December 31, 1999, the estimated purchase price of
the Class A Common Stock in the event the put option is exercised would be
approximately $951,000.

The Company rents office facilities, leases computer equipment, leases
satellite transponder and enters into digital satellite agreements under various
operating agreements. As of December 31, 2000, future minimum lease payments
under these noncancelable operating leases for each of the next five fiscal
years and thereafter, are as follows:

For the Year Ended
December 31,
--------------------------------------

2001 $ 2,109,000
2002 2,392,000
2003 2,166,000
2004 2,166,000
2005 2,166,000
Thereafter 4,492,000
------------
$ 15,491,000
============

(18) CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS

The Notes are fully and unconditionally guaranteed, jointly and severally,
on a senior unsecured basis by the following wholly-owned subsidiaries of the
Company: JPN, Inc., Jones Direct, Ltd., Jones Space Holdings, Inc., Jones Earth
Segment, Inc., Jones Infomercial Networks, Inc., Jones Radio Holdings, Inc.,
Great American Country, Inc., Jones Galactic Radio, Inc., Jones Infomercial
Network Ventures, Inc., Jones Galactic Radio Partners, Inc., Jones Radio
Network, Inc., Jones Audio Services, Inc., Jones Radio Network Ventures, Inc.,
Jones MediaAmerica, Inc., Jones Broadcast Programming, Inc., Jones MatchMedia,
Inc., and Jones MAI Radio, Inc. The only existing subsidiary of the Company that
did not guarantee the Notes is the PIN Venture (the "Non-Guarantor Subsidiary").
Superaudio and Jones/Capstar were subsidiaries of the Company that did not
guarantee the Notes. Superaudio ceased distributing its programming and all
other operating activities on January 31, 2000. Jones Radio Network, Inc.
purchased all Jones/Capstar assets on April 1, 2000 and now produces and
distributes its programming. Assets and liabilities that were transferred to
Jones Radio Network, Inc. are now reported under the "Subsidiary Guarantors."

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company has not provided separate complete financial statements and
other disclosures of the respective Subsidiary Guarantors because management has
determined that such information is not material to investors. There are no
significant contractual restrictions on distributions from each of the
Subsidiary Guarantors to the Company.

Investments in subsidiaries are required to be accounted for by investors
on the equity method for purposes of the supplemental condensed consolidating
financial statement presentation. Under this method, investments are recorded at
cost and adjusted for the investor company's ownership share of the
subsidiaries' cumulative results of operations. In addition, investments
increase in the amount of contributions to subsidiaries and decrease in the
amount of distributions from subsidiaries. The elimination entries necessary for
consolidation purposes eliminate the equity method accounting for the investment
in subsidiaries and the equity in earnings of subsidiaries, intercompany
payables and receivables and other transactions between subsidiaries including
contributions and distributions.

Sections 13 and 15(d) of the Securities Exchange Act of 1934 require
presentation of the following supplemental condensed consolidating financial
statements. Presented below is condensed consolidating financial information for
the Company and its subsidiaries as of and for the years ended December 31,
1998, 1999 and 2000.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

INCOME STATEMENT DATA:
Revenues ......................................... $ 173 $ 25,597 $ 14,163 $ (1,721) $ 38,212
Operating expenses:
Operations ..................................... 98 15,915 12,889 (1,721) 27,181
Selling and marketing .......................... 58 4,543 811 -- 5,412
General and administrative ..................... 1,116 -- -- -- 1,116
Depreciation and amortization .................. 5 6,166 95 -- 6,266
-------- -------- -------- -------- --------
Total operating expenses ..................... 1,277 26,624 13,795 (1,721) 39,975
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) .......................... (1,104) (1,027) 368 -- (1,763)
-------- -------- -------- -------- --------
OTHER EXPENSE (INCOME):
Interest expense ............................... 7,173 1,798 -- -- 8,971
Interest income ................................ (615) (33) (128) -- (776)
Equity share of loss (income) of subsidiaries .. 2,597 (2,710) -- 170 57
Other expense (income), net .................... 1,190 (31) 12 -- 1,171
-------- -------- -------- -------- --------
Total other expense (income) ................. 10,345 (976) (116) 170 9,423
-------- -------- -------- -------- --------
Income (loss) before income taxes and
minority interest ............................ (11,449) (51) 484 (170) (11,186)
Income tax provision ........................... 1 48 -- -- 49
-------- -------- -------- -------- --------
Income (loss) before minority interest ......... (11,450) (99) 484 (170) (11,235)
-------- -------- -------- -------- --------
Minority interests in net income of
consolidated subsidiaries .................... -- -- -- 215 215
-------- -------- -------- -------- --------
NET INCOME (LOSS) .............................. $(11,450) $ (99) $ 484 $ (385) $(11,450)
======== ======== ======== ======== ========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................. $ (11,450) $ (99) $ 484 $ (385) $ (11,450)
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Non-cash expenses (income) .................. (54) 6,359 97 385 6,787
Distributions received ...................... -- 350 -- -- 350
Net change in assets and liabilities ........ (4,625) 1,979 (106) -- (2,752)
--------- --------- --------- --------- ---------
Net cash provided by (used in)
operating activities .................... (16,129) 8,589 475 -- (7,065)
--------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ............ -- (2,067) (191) -- (2,258)
Sale of property and equipment ................ -- 41 16 -- 57
Dividend from joint venture ................... 914 -- -- (914) --
Purchase of investments ....................... (2,760) -- -- -- (2,760)
Purchase of intangible assets ................. -- (3,359) -- -- (3,359)
Purchase of MediaAmerica, Inc. ................ (26,700) -- -- -- (26,700)
--------- --------- --------- --------- ---------
Net cash used in investing activities ..... (28,546) (5,385) (175) (914) (35,020)
--------- --------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deferred financing and
offering costs .............................. (4,432) (115) -- -- (4,547)
Advances to/from subsidiaries ................. (32,987) 32,987 -- -- --
Repayment of borrowings ....................... -- (6,555) -- -- (6,555)
Repayment of capital lease obligations ........ -- (28,757) -- -- (28,757)
Senior secured notes .......................... 100,000 -- -- -- 100,000
Dividend paid to partners ..................... -- -- (2,146) 2,146 --
Distributions paid to minority interest ....... -- 113 -- (1,232) (1,119)
--------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities .................... 62,581 (2,327) (2,146) 914 59,022
--------- --------- --------- --------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ................................... 17,906 877 (1,846) -- 16,937
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD ........................................ (25) 79 3,663 -- 3,717
--------- --------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........ $ 17,881 $ 956 $ 1,817 $ -- $ 20,654
========= ========= ========= ========= =========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 1999:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

ASSETS:
Cash and cash equivalents .................... $ 7,889 $ 2,708 $ 2,674 $ -- $ 13,271
Available for sale securities ................ 6,888 -- -- -- 6,888
Accounts receivable .......................... -- 13,627 422 -- 14,049
Other current assets ......................... 5 1,772 57 -- 1,834
--------- --------- --------- --------- ---------
Total current assets .................. 14,782 18,107 3,153 -- 36,042
--------- --------- --------- --------- ---------
Property and equipment ....................... 13 22,584 363 -- 22,960
Intangible assets, net ...................... 1 63,640 2 -- 63,643
Other long-term assets ....................... 34,393 (28,172) 313 (718) 5,816
--------- --------- --------- --------- ---------
Total assets .......................... $ 49,189 $ 76,159 $ 3,831 $ (718) $ 128,461
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT):
Accounts payable ............................. $ 869 $ 2,242 $ 1,628 $ -- $ 4,739
Producers' fees payable ...................... -- 5,308 -- -- 5,308
Accrued liabilities .......................... 5,978 5,320 143 -- 11,441
Other current liabilities .................... (62,175) 63,001 483 -- 1,309
--------- --------- --------- --------- ---------
Total current liabilities ............. (55,328) 75,871 2,254 -- 22,797
Senior secured notes ......................... 100,000 -- -- -- 100,000
Other long-term liabilities .................. 603 582 -- -- 1,185
--------- --------- --------- --------- ---------
Total long-term liabilities ........... 100,603 582 -- -- 101,185
--------- --------- --------- --------- ---------
Minority interests ........................... -- -- -- 565 565
Common stock subject to put .................. 1,213 -- -- -- 1,213
Shareholders' equity (deficit):
Series A Preferred Stock .................. 23,975 -- -- -- 23,975
Class A Common Stock ...................... 53 -- -- -- 53
Class B Common Stock ...................... 22 -- -- -- 22
General Partners' Contributions ........... -- -- 350 (350) --
Additional paid-in capital ................ 27,588 -- -- -- 27,588
Other comprehensive income ................ (26) -- -- -- (26)
Retained earnings (accumulate deficit) .... (48,911) (294) 1,227 (933) (48,911)
--------- --------- --------- --------- ---------
Total shareholders'
equity (deficit) .................... 2,701 (294) 1,577 (1,283) 2,701
--------- --------- --------- --------- ---------
Total liabilities and shareholders'
equity (deficit) .................... $ 49,189 $ 76,159 $ 3,831 $ (718) $ 128,461
========= ========= ========= ========= =========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

INCOME STATEMENT DATA:
Revenue ........................................... $ -- $ 42,052 $ 22,314 $ -- $ 64,366
Operating expenses:
Operating ....................................... -- 23,542 19,623 -- 43,165
Selling and marketing ........................... -- 5,669 769 -- 6,438
General and administrative ...................... 1,943 -- -- -- 1,943
Depreciation and amortization ................... 9 10,650 116 -- 10,775
-------- -------- -------- -------- --------
Total operating expenses ...................... 1,952 39,861 20,508 -- 62,321
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) ........................... (1,952) 2,191 1,806 -- 2,045
-------- -------- -------- -------- --------
OTHER EXPENSE (INCOME):
Interest expense ................................ 12,751 -- -- -- 12,751
Interest income ................................. (568) (324) (130) -- (1,022)
Equity share of loss (income) of subsidiaries ... (2,700) 3,772 (111) (1,067) (106)
Other expense (income), net ..................... 94 (22) 2 -- 74
-------- -------- -------- -------- --------
Total other expense (income) .................. 9,577 3,426 (239) (1,067) 11,697
-------- -------- -------- -------- --------
Income (loss) before income taxes and
minority interest ............................. (11,529) (1,235) 2,045 1,067 (9,652)
Income tax provision (benefit) .................. (1,466) 996 -- -- (470)
-------- -------- -------- -------- --------
Income (loss) before minority interest .......... (10,063) (2,231) 2,045 1,067 (9,182)
-------- -------- -------- -------- --------
Minority interest in net income of
consolidated subsidiaries ..................... -- -- -- 881 881
-------- -------- -------- -------- --------
NET INCOME (LOSS) ............................... $(10,063) $ (2,231) $ 2,045 $ 186 $(10,063)
======== ======== ======== ======== ========

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
FOR THE YEAR ENDED DECEMBER 31, 1999:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ........................ $(10,063) $ (2,231) $ 2,045 $ 186 (10,063)
Adjustment to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Non-cash expenses (income) ............. 2,340 10,106 5 (186) 12,265
Net change in assets and liabilities ... (21,837) 21,039 994 -- 196
-------- -------- -------- -------- --------
Net cash provided by (used in)
operating activities ............... (29,560) 28,914 3,044 -- 2,398
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ....... (12) (651) (187) -- (850)
Cable programming distribution payments .. -- (6,353) -- -- (6,353)
Purchase of investments .................. (4,154) -- -- -- (4,154)
Purchase of intangible assets ............ -- (398) -- -- (398)
Purchase of Broadcast Programming ........ -- (20,877) -- -- (20,877)
-------- -------- -------- -------- --------
Net cash provided by (used in)
investing activities ............... (4,166) (28,279) (187) -- (32,632)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deferred offering costs ...... (241) -- -- -- (241)
Proceeds from Series A Preferred Stock ... 23,975 -- -- -- 23,975
Dividend paid to partners ................ -- -- (2,000) 2,000 --
Distributions paid to minority interest .. -- 1,117 -- (2,000) (883)
-------- -------- -------- -------- --------
Net cash provided by (used in)
financing activities ............... 23,734 1,117 (2,000) -- 22,851
-------- -------- -------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ......................... (9,992) 1,752 857 -- (7,383)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD ................................ 17,881 956 1,817 -- 20,654
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ... $ 7,889 $ 2,708 $ 2,674 $ -- $ 13,271
======== ======== ======== ======== ========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2000:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

ASSETS:
Cash and cash equivalents .................. $ 12,178 $ 1,127 $ 1,595 $ -- $ 14,900
Available for sale securities .............. 3,312 -- 400 -- 3,712
Accounts receivable ........................ -- 15,604 387 -- 15,991
Other current assets ....................... 18 1,274 39 -- 1,331
--------- --------- --------- --------- ---------
Total current assets ................ 15,508 18,005 2,421 -- 35,934
--------- --------- --------- --------- ---------
Property and equipment ..................... 34 20,436 363 -- 20,833
Intangible assets, net ..................... 3,348 56,473 1 -- 59,822
Other long-term assets ..................... 32,663 (26,173) -- (1,539) 4,951
--------- --------- --------- --------- ---------
Total assets ........................ $ 51,553 $ 68,741 $ 2,785 $ (1,539) $ 121,540
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT):
Accounts payable ........................... $ 1,299 $ 3,095 $ 1,684 $ -- $ 6,078
Producers' fees payable .................... -- 5,352 -- -- 5,352
Accrued liabilities ........................ 6,342 4,897 70 -- 11,309
Other current liabilities .................. (53,100) 53,625 365 -- 890
--------- --------- --------- --------- ---------
Total current liabilities ........... (45,459) 66,969 2,119 -- 23,629
--------- --------- --------- --------- ---------
Senior secured notes ....................... 100,000 -- -- -- 100,000
Other long-term liabilities ................ 1,026 601 -- -- 1,627
--------- --------- --------- --------- ---------
Total long-term liabilities ......... 101,026 601 -- -- 101,627
--------- --------- --------- --------- ---------
Minority interest .......................... -- -- -- 298 298
Common stock subject to put ................ 1,311 -- -- -- 1,311
Shareholders' equity (deficit):
Series A Preferred stock ................ 23,975 -- -- -- 23,975
Class A Common Stock .................... 53 -- -- -- 53
Class B Common Stock .................... 22 -- -- -- 22
General Partners' Contributions ......... -- -- 350 (350) --
Additional paid-in capital .............. 28,453 -- -- -- 28,453
Other comprehensive income .............. (2) -- -- -- (2)
Retained earnings (deficit) ............. (57,826) 1,171 316 (1,487) (57,826)
--------- --------- --------- --------- ---------
Total shareholders'
equity (deficit) .................. (5,325) 1,171 666 (1,837) (5,325)
--------- --------- --------- --------- ---------
Total liabilities and shareholders'
equity (deficit) .................. $ 51,553 $ 68,741 $ 2,785 $ (1,539) $ 121,540
========= ========= ========= ========= =========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

INCOME STATEMENT DATA:
Revenues .......................................... $ -- $ 61,691 $ 25,891 $ (1,741) $ 85,841
Operating expenses:
Operating ....................................... -- 33,521 22,623 (1,741) 54,403
Selling and marketing ........................... -- 9,334 897 -- 10,231
General and administrative ...................... 2,503 -- -- -- 2,503
Depreciation and amortization ................... 88 14,114 144 -- 14,346
-------- -------- -------- -------- --------
Total operating expenses .................... 2,591 56,969 23,664 (1,741) 81,483
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) ..................... (2,591) 4,722 2,227 -- 4,358
-------- -------- -------- -------- --------
OTHER EXPENSE (INCOME):
Interest expense ................................ 12,536 -- -- -- 12,536
Interest income ................................. (624) (183) (238) -- (1,045)
Write-off of deferred offering costs ............ 725 -- -- -- 725
Equity share of loss (income) of subsidiaries ... (6,324) 7,649 -- (1,327) (2)
Other expense (income), net ..................... 11 (213) 62 -- (140)
-------- -------- -------- -------- --------
Total other expense (income) ................ 6,324 7,253 (176) (1,327) 12,074
-------- -------- -------- -------- --------
Income (loss) before income taxes and
minority interest ............................... (8,915) (2,531) 2,403 1,327 (7,716)
Income tax provision (benefit) .................... -- 123 1 -- 124
-------- -------- -------- -------- --------
Income (loss) before minority interest ............ (8,915) (2,654) 2,402 1,327 (7,840)
Minority interest in net income of
consolidated subsidiaries ....................... -- -- -- 1,075 1,075
-------- -------- -------- -------- --------
NET INCOME (LOSS) ................................. $ (8,915) $ (2,654) $ 2,402 $ 252 $ (8,915)
======== ======== ======== ======== ========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000:

Non-
The Subsidiary Guarantor Elimination
Company Guarantors Subsidiaries Entries Reported
-------- ---------- ------------ ----------- --------
(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ............................... $ (8,915) $ (2,654) $ 2,402 $ 252 $ (8,915)
Adjustment to reconcile net loss to
net cash provided by (used in)
operating activities:
Non-cash expenses ............................. 303 16,991 206 (252) 17,248
Net change in assets and liabilities .......... 9,848 (10,307) (82) -- (541)
-------- -------- -------- -------- --------
Net cash provided by operating activities ... 1,236 4,030 2,526 -- 7,792
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment .............. (31) (3,219) (205) -- (3,455)
Purchases of intangible assets .................. (9) (4,088) -- -- (4,097)
Purchases (sale) of investments ................. 3,577 23 (400) -- 3,200
Liquidation of partnerships ..................... -- 15 -- -- 15
-------- -------- -------- -------- --------
Net cash provided by (used in)
investing activities ...................... 3,537 (7,269) (605) -- (4,337)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deferred offering costs ............. (484) -- -- -- (484)
Distributions of minority interest .............. -- 1,658 (3,000) -- (1,342)
-------- -------- -------- -------- --------
Net cash used in financing activities ....... (484) 1,658 (3,000) -- (1,826)
-------- -------- -------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ................................ 4,289 (1,581) (1,079) -- 1,629
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD ....................................... 7,889 2,708 2,674 -- 13,271
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD ................................... $ 12,178 $ 1,127 $ 1,595 $ -- $ 14,900
======== ======== ======== ======== ========

(19) REPORTABLE SEGMENTS

During the year 2000, the Company had five reportable segments: network
radio, cable television programming, Internet advertising sales services,
satellite services and general and administrative-corporate. The Company's
reportable segments have been determined in accordance with the Company's
internal management structure. See Note 2 for descriptive information about the
Company's segments and the summary of significant accounting policies. The
Company evaluates performance based on many factors, one of the primary measures
is EBITDA. EBITDA represents operating income (loss) plus depreciation and
amortization minus the EBITDA attributable to the minority interests in the PIN
Venture, a consolidated 55%-owned subsidiary.

The following tables set forth the Company's financial results by operating
segments. The presentation of reportable segments has been changed from that
presented in the prior periods to combine the results of operations from
Internet websites related to the Company's radio programming with the network
radio segment and the results of operations from Internet websites related to
one of the Company's cable television networks with the cable television
programming segment. Because of the complementary nature of the Company's
Internet websites to their respective radio program and cable television network
counterparts, the Company has decided to include the results of operations of
these companion websites in the Company's respective network radio and cable
television programming operations. In addition, the Company has combined the
presentation of its radio programming content and radio advertising sales
services segments

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

into the network radio segment. Management believes that this presentation
provides a more meaningful analysis of the Company's business segments.

Year Ended December 31,
1998 1999 2000
------------ ------------- ------------
(in thousands)

Revenues:
Network radio ....................................... $ 15,148 $ 28,522 $ 41,991
Cable television programming ........................ 16,892 27,345 34,311
Internet advertising sales services ................. -- -- 1,532
Satellite services .................................. 6,172 8,499 8,007
-------- -------- --------
Total revenues ................................... $ 38,212 $ 64,366 $ 85,841
======== ======== ========

EBITDA:
Network radio ....................................... $ 567 $ 5,245 $ 10,277
Cable television programming ........................ 177 2,332 3,417
Internet advertising sales services ................. -- -- 146
Satellite services .................................. 4,875 7,186 7,367
-------- -------- --------
Segment total .................................... 5,619 14,763 21,207
Reconciliation to operating income:
General and administrative - Corporate .............. 1,116 1,943 2,503
Depreciation and amortization ....................... 6,266 10,775 14,346
-------- -------- --------
Total operating income (loss) .................... $ (1,763) $ 2,045 $ 4,358
======== ======== ========

Reconciliation of segment EBITDA to total EBITDA:
Segment total ....................................... $ 5,619 $ 14,763 $ 21,207
General and administrative - general ................ (1,116) (1,943)
(2,503)
Less: EBITDA minority interest ................... (213) (860) (1,061)
-------- -------- --------
EBITDA ............................................. $ 4,290 $ 11,960 $ 17,643
======== ======== ========
Depreciation and amortization:
Network radio ....................................... $ 1,592 $ 4,647 $ 6,676
Cable television programming ........................ 704 2,093 3,702
Internet advertising sales services ................. -- -- 24
Satellite services .................................. 3,965 4,026 3,856
-------- -------- --------
Segment total .................................... 6,261 10,766 14,258
General and administrative - Corporate .............. 5 9 88
-------- -------- --------
Total depreciation and amortization .............. $ 6,266 $ 10,775 $ 14,346
======== ======== ========

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Year Ended December 31,
1998 1999 2000
-------- -------- --------

Total assets:
Network radio ......................... $ 48,545 $ 39,582 $ 49,346
Cable television programming .......... 12,437 20,058 4,091
Internet advertising sales services ... -- -- 198
Satellite services .................... 23,183 19,633 16,352
-------- -------- --------
Segment total ...................... 84,165 79,273 69,987
Corporate ............................. 26,729 49,189 51,553
-------- -------- --------
Total assets ....................... $110,894 $128,462 $121,540
======== ======== ========
Capital expenditures:
Network radio ......................... $ 582 $ 405 $ 2,499
Cable television programming .......... 336 246 275
Internet advertising sales services ... -- -- 115
Satellite services .................... 1,337 186 536
-------- -------- --------
Segment total ...................... 2,255 837 3,425
Corporate ............................. 3 13 30
-------- -------- --------
Total capital expenditures ......... $ 2,258 $ 850 $ 3,455
======== ======== ========

Segment EBITDA excludes intersegment transactions between the satellite
services and cable television programming segments for the satellite services
provided to the PIN Venture and Great American Country for $3,581,000 $3,526,000
and $3,794,000, for the years ended December 31, 1998, 1999 and 2000,
respectively. Segment EBITDA differs from operating income (loss) of each of the
segments by the amount of depreciation and amortization expenses of each
segment.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Jones Media Networks, Ltd.:

We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements of Jones Media
Networks, Ltd. and subsidiaries as of December 31, 1999 and 2000, and for the
years ended December 31, 1998, 1999 and 2000 included in this annual report on
Form 10-K, and have issued our report thereon dated February 2, 2001. Our audits
were made for the purpose of forming an opinion on these financial statements
taken as a whole. The supplemental schedule included in this Form 10-K is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commissions rules and is not part of
the financial statements. The schedule has been subjected to the auditing
procedures applied in the audits of these financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to these financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Denver, Colorado
February 2, 2001

SCHEDULE II

JONES MEDIA NETWORKS, LTD. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

Balance Additions Deductions
at charged to for Balance
beginning costs and accounts at end of
Classifications of period expenses written-off period
- --------------- ---------- ---------- ----------- ----------

Fiscal Year ended December 31, 2000:
Allowance for Doubtful Accounts .... $1,192,818 $1,012,451 $ (187,791) $2,017,478
Fiscal Year ended December 31, 1999:
Allowance for Doubtful Accounts .... 897,487 750,580 (455,249) 1,192,818
Fiscal Year ended December 31, 1998:
Allowance for Doubtful Accounts .... 157,405 858,765 (118,683) 897,487

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Our Articles of Incorporation provide that, with respect to the election of
Directors, the holders of Class A Common Stock and Series A Convertible
Preferred Stock, voting together as a separate class, are entitled to elect that
number of Directors constituting 25% of the total membership of the Board of
Directors. If such 25% is not a whole number, holders of Class A Common Stock
and Series A Convertible Preferred Stock are entitled to elect the nearest
higher whole number of Directors constituting 25% of the membership of the Board
of Directors. Holders of Class B Common Stock, voting as a separate class, are
entitled to elect the remaining Directors. Directors serve until our next annual
meeting and until their successors shall be elected and qualified.

Set forth below is certain information concerning each person who is an
executive officer or director. All directors hold office for a period of one
year or until their respective successors are elected and qualified, or until
their earlier resignation or removal.

NAME AGE POSITION

Glenn R. Jones .................. 71 Chairman of the Board
Jeffrey C. Wayne ................ 46 President and Director
Jay B. Lewis .................... 42 Group Vice President/Finance,
Chief Financial Officer,
Treasurer and Director
Ron Hartenbaum .................. 48 President-Jones Radio Network
and Director(1)
Gary Schonfeld .................. 48 Chief Executive Officer- Jones
MediaAmerica(1)
Amy Mickles ..................... 33 Vice President/Controller
Yrma G. Rico .................... 53 Director
Fred A. Vierra .................. 69 Director
Timothy J. Burke ................ 50 Director
James J. Krejci ................. 59 Director

- -------------------

(1) Pursuant to an agreement entered into in connection with the acquisition of
Jones MediaAmerica, Messrs. Hartenbaum and Schonfeld together may nominate
one

member of our Board of Directors. This right terminates upon the earlier of
July 10, 2007 and the date on which, among other things, the direct or
indirect ownership of Class A Common Stock by Messrs. Hartenbaum and
Schonfeld falls below certain levels.

The principal occupations for at least the past five years of each of our
directors and executive officers and certain are as follows:

GLENN R. JONES has been involved in the cable television business in
various capacities since 1961 and currently serves as a director and/or
executive officer of many of our affiliates, including being Chairman of the
Board and Chief Executive Officer of JonesKnowledge.com, Inc. He has been our
Chairman of the Board since 1993 and was President from May 1999 to October
1999. For more than five years, until April 1999, Mr. Jones was Chairman and
Chief Executive Officer of Jones Intercable, Inc., a multiple system cable
television operator. In addition, Mr. Jones is a member of the Board and
Education Council of the National Alliance of Business. In 1994, Mr. Jones was
inducted into Broadcasting and Cable's Hall of Fame. Mr. Jones received a B.S.
in Economics from Allegheny College and a J.D. from the University of Colorado
School of Law.

JEFFREY C. WAYNE, who served as President and Chief Operating Officer,
Cable Network Operations, and as Vice President/General Manager for Great
American Country since July 1997, was elected President, Cable Programming
Networks and President/General Manager for Great American Country in January
1998, and was elected to be our President and a director in October 1999. Mr.
Wayne is a 24-year veteran of the cable television industry. From 1995 to July
1997, Mr. Wayne was Vice President of Programming for The Providence Journal's
Broadcast Division. At The Providence Journal, he was responsible for overseeing
a portfolio of cable network programming ventures including The Television Food
Network and America's Health Network. From 1978 to 1995, Mr. Wayne held various
marketing positions with Colony Communications, Inc., a top 20 multiple system
cable operator with over 800,000 subscribers, serving as Executive Director of
Marketing and Ad Sales from 1988 to 1993 and Vice President of Marketing and Ad
Sales from 1994 to 1995. Mr. Wayne has a B.A. in Political Science from the
University of Colorado.

JAY B. LEWIS served as Vice President/Finance and as Chief Financial
Officer since July 1996 and was elected Group Vice President/Finance and
appointed as a director, in October 1996. Mr. Lewis has also served as Treasurer
since September 1994. From January 1995 to October 1996, Mr. Lewis was Vice
President of Finance and Treasurer of Jones International, our parent company,
and certain of its subsidiaries. From February 1986 to December 1994, Mr. Lewis
was employed in various capacities, including Controller and Treasurer, by Jones
Spacelink, Ltd., a former affiliate of ours. Mr. Lewis received a B.S. in
Accounting from the University of Wyoming in 1980.

RON HARTENBAUM co-founded Jones MediaAmerica in 1987, and has been its
Chairman since its formation. Mr. Hartenbaum became the President of Jones Radio

Network and a director upon the consummation of the MediaAmerica acquisition in
July 1998. Mr. Hartenbaum has over 20 years of experience in radio advertising
sales. Before forming MediaAmerica, Mr. Hartenbaum was Vice President and
Director of Advertising Sales for Westwood One for six years. Prior to joining
Westwood One, Mr. Hartenbaum was involved in advertising sales for ABC Radio and
advertising development at ad agencies Needham Harper Worldwide and Grey
Advertising for national advertisers. Mr. Hartenbaum has a B.A. from Queens
College and an MBA from New York University.

GARY SCHONFELD co-founded Jones MediaAmerica and has served as its
President since its formation in 1987. Mr. Schonfeld became the Chief Executive
Officer-Jones MediaAmerica upon the consummation of the MediaAmerica acquisition
in July 1998. Mr. Schonfeld has over 20 years of experience in the sales arena,
including Vice-President Eastern Sales Region for Westwood One. Previously Mr.
Schonfeld served as an account executive with CBS Radio Networks and in various
positions with Fairchild Publications, Y&R Advertising and ABC Radio. Mr.
Schonfeld has a B.A. from the University of Vermont and an M.A. from the
University of Michigan.

AMY MICKLES has served as our Controller since July 1999 and was elected
our Vice President/Controller in April 2000. Ms. Mickles has been associated
with Jones International since February 1995, serving as Senior Accountant from
February 1995 to December 1995, as Accounting Manager from January 1996 to
February 1998 and Director of Financial Accounting from March 1998 to June 1999.
From February 1993 to February 1995, Ms. Mickles was a Senior Auditor at Banc
One Corporation (now Banc One, National Association), and from August 1991 to
February 1993, she was an auditor at Deloitte & Touche LLP. Ms. Mickles received
a B.S. in Accounting from the University of Houston and is a certified public
accountant in the State of Colorado.

YRMA G. RICO, one of our directors, is General Manager of KCEC-TV, Channel
50, in Denver, Colorado, a position she has held since 1992. Ms. Rico was
appointed a director in July 1998. She has 19 years of experience in the
television industry and has served as the National Sales Manager for KCEC-TV and
WNAC-TV, in Providence, Rhode Island.

FRED A. VIERRA, one of our directors, is a consultant to Liberty Media,
Inc., a position he has held since January 1998. Mr. Vierra was appointed as
director in July 1998. From 1994 to January 1998, he served as Vice Chairman and
Chief Executive Officer of Tele- Communications International, Inc. From 1992 to
1994, he served as an Executive Vice President of TCI. Mr. Vierra served as the
President of United Artists Entertainment Company from 1989 to 1991 and as the
President of United Cable Television Corporation from 1982 to 1989, when the
company was merged into United Artists. Mr. Vierra is a member of the Board of
Directors of Flextech plc. Mr. Vierra has previously served as a member of the
Board of Directors of Turner Broadcasting and the Discovery Channel. Mr. Vierra
has a B.S. in Business Administration from the University of Tulsa.

TIMOTHY J. BURKE was appointed director in October 1999. Mr. Burke has been
with the Jones International group of companies since 1982, serving as corporate
tax manager, Vice President/Taxation and then Group Vice President
Taxation/Administration of Jones Intercable. Mr. Burke currently is Group Vice
President of Administration and Acting Financial Operations Officer of Jones
International. Prior to joining the Jones International group of companies, Mr.
Burke was employed by Arthur Andersen & Co. (now Arthur Andersen LLP). Mr. Burke
received a B.A. in Accounting and a J.D. from the University of Iowa.

JAMES J. KREJCI was appointed as a director in March 2000. Mr. Krejci is
President and CEO of Comtec International, Inc., a company in the specialized
mobile radio services business, headquartered in Englewood, Colorado. Prior to
joining Comtec International, Inc. in February 1998, Mr. Krejci was President
and CEO of Imagelink Technologies, Inc., headquartered in Boulder, Colorado,
from June 1996 to February 1998. Prior to that, he was President of the
International Division of International Gaming Technology, the world's largest
gaming equipment manufacturer, with headquarters in Reno, Nevada from May 1994
to February 1995. He was formally a director of Jones Intercable and an officer
and director of various affiliates of Jones International.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the
compensation for services in all capacities for the years ended December 31,
1998, 1999 and 2000 for our President, two of our former Presidents, and our
other four most highly compensated executive officers and key employees whose
total annual salary and bonus exceeded $100,000 (collectively, the "Named
Executive Officers").

SUMMARY COMPENSATION TABLE

LONG TERM
ALL OTHER COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS(2)

Jeffrey C. Wayne.............. 2000 $ 225,000 $ 93,215 $ 18,360 20,000
President 1999 190,246 331,000(3) 33,751 100,000
1998 170,007 90,275 10,200 25,000

Jay B. Lewis.................. 2000 194,700 82,010 15,822 37,500
Group Vice President/ 1999 192,758 60,000 16,780 --
Finance and Chief Financial 1998 175,008 75,000 14,100 62,500
Officer

Ron Hartenbaum................ 2000 309,230 120,000 20,250 --
President of Jones Radio 1999 306,474 37,500 16,800 --
Network 1998 141,667(4) -- -- --

Gary Schonfeld................ 2000 309,985 120,000 20,250 --
Chief Executive Officer- 1999 306,984 37,500 16,800 --
Jones MediaAmerica 1998 141,667(4) -- -- --

Amy Mickles.................... 2000 95,798 44,000 3,024 10,000
Vice President/Controller 1999 40,000(5) 5,000 1,200 6,250
1998 1,250

Glenn R. Jones(6)............. 2000 50,000 -- -- --
Former President 1999 55,289 -- 3,317 --
1998 -- -- -- 62,500

Gregory J. Liptak(7).......... 2000 -- -- -- --
Former President 1999 94,637 -- 14,826 --
1998 283,879 75,000 17,033 50,000

- -------------------

(1) Our employees are entitled to participate in a 401(k) profit sharing plan
and/or a deferred compensation plan. The amounts shown in this column
represent our contributions to the 401(k) profit sharing plan and/or the
deferred compensation plan for the benefit of the named person's account.

(2) Represents the number of shares of Class A Common Stock underlying stock
options granted to named executives.

(3) Pursuant to an agreement with Mr. Wayne, in November 1999, Mr. Wayne
received a $250,000 bonus based on attainment of a specified level of
distribution of GAC. Mr. Wayne was elected President in October 1999.

(4) Represents partial year payments from commencement of employment in July
1998.

(5) Represents partial year payments from commencement of employment in July
1999.

(6) Mr. Jones has been Chairman of our Board since our inception. He did not
receive any compensation for services during periods prior to May 1999. He
served as our President from May 1999 to October 1999, during which period
he received compensation of $45,833. Since such period, his annual
compensation is $50,000.

(7) On April 27, 1999, Mr. Liptak resigned as President. Mr. Liptak's stock
option was forfeited upon his termination.

BONUS PLAN

Effective for 2000, the Board adopted a bonus plan that will generally
cover all of our divisions and companies, except PIN, which has its own bonus
plan. The plan covers our associates, including executives. Bonuses will be
calculated on a number of different bases, depending upon the division or
company involved, the position held by the recipient, the nature of the business
of that division or company, the specific targets and the means of measuring
achievement (such as comparison of revenues and EBITDA with budgeted revenue and
EBITDA levels). Bonuses are generally based on a percentage of base salary.
Bonuses will be partially "objective" (for example, meeting certain budget
criteria) and, to a lesser extent, "subjective" (relating specifically to an
individual's overall achievements during the year). The bonuses of the Named
Executive Officers will be in the range of 25% of base salary if budget levels
are achieved. Other personnel will participate at ranges of approximately 3% to
25% of their base salaries, depending on their achievement of the objective and
subjective measures under the plan. Extraordinary levels of achievement could
result in bonuses exceeding 25% of an individual's base salary.

OPTION GRANTS IN 2000

Options to acquire 1,015,000 shares of Class A Common Stock have been
granted under our 1998 Stock Option Plan (the "Plan"), of which options for
141,250 shares have been terminated or forfeited upon resignation of the
holders. No options have been exercised. The following table sets forth
information with respect to grants of stock options during 2000 to the executive
officers named in the Summary Compensation Table.

POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
------------------------- -------------------------
% OF TOTAL
OPTIONS
GRANTED
TO ALL EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED(2) IN 2000 ($/SHARE) DATE 5% ANNUAL 10% ANNUAL
- ---- ---------- ---------- --------- ---------- --------- ----------

Jeffrey C. Wayne 20,000 8.9% $ 12.00 12/18/10 $154,580 $ 407,380
Jay B. Lewis 37,500 16.7% 12.00 12/18/10 289,838 763,838
Amy Mickles 10,000 4.5% 12.00 04/12/10 70,660 182,350

- -------------------

(1) The dollar amounts shown under these columns are the result of calculations
at 5% and 10% compound growth rates set by the Securities and Exchange
Commission, and therefore are not intended to forecast possible future
appreciation of our stock price. In all cases, the appreciation is
calculated from the award date to the end of the option term.

(2) Represents the number of shares of Class A Common Stock underlying the
options granted.

CHANGES OF VESTING OF CERTAIN OPTIONS. Certain stock option agreements for
Messrs. Wayne and Lewis, to purchase an aggregate of 120,000 and 100,000 shares
of Class A Common Stock, respectively, require the vesting of any unvested
portions of said option upon the occurrence of certain events, including the
sale of all or substantially all of the assets or a merger in which we, or a
company controlled by Mr. Jones, is not the surviving corporation. These options
would not so vest if the optionee is retained in his present position and job
site after the event.

COMMITTEES

Our Board currently has an executive committee, a compensation committee
and an audit committee. The executive committee was established on October 11,
1999 and consists of Messrs. Jones, Hartenbaum and Burke. No executive committee
meetings were held in 2000. The executive committee may act in the Board's
stead, except where action by the full Board is required by law, by our articles
of incorporation, our bylaws or the indenture governing our Senior Notes.

The compensation committee was established on March 14, 2000 and consists
of Messrs. Vierra and Krejci and Ms. Rico. No compensation committee meetings
were held during 2000. The compensation committee determines compensation,
excluding awards under our 1998 Stock Option Plan, for our executive officers.

The audit committee was established on March 14, 2000 and consists of
Messrs. Krejci and Vierra and Ms. Rico. Three audit committee meetings were held
during 2000. The audit committee makes recommendations concerning the engagement
of independent public accountants, reviews with the independent public
accountants the results of audits, approves professional services provided by
the independent public accountants, considers the range of audit and non-audit
fees and reviews the adequacy of our internal accounting controls.

COMPENSATION OF DIRECTORS

We pay directors who are not officers of ours or our affiliates, $2,500 per
quarter and $500 for attending in person each meeting of the board or one of its
committees. All directors are reimbursed for their expenses in attending board
and committee meetings. All directors hold office for a period of one year or
until their successors are elected and qualified, or until their earlier
resignation or removal.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Not applicable.

EMPLOYMENT AGREEMENTS

On July 10, 1998, we entered into employment agreements with Ron Hartenbaum
and Gary Schonfeld. These employment agreements are for three years and restrict
them from competing with us during the term of employment and for two years
after the agreements terminate. These agreements were amended on January 10,
2001 to extend their term to July 10, 2004 and to increase the annual salaries
of Messrs. Hartenbaum and Schonfeld to $350,000. These agreements renew annually
unless terminated by the parties. Each agreement provides for eligibility for a
variety of employee benefits and plans generally made available to our key
associates at their level. On January 10, 2001, Messrs. Hartenbaum and Schonfeld
were each granted a stock option to purchase 75,000 shares of our Class A Common
Stock at an exercise price per share of $12.00, which was determined to be not
less than the fair market value of a share of our Class A Common Stock on the
date of grant. Both of these stock option agreements require the vesting of any
unvested portions of said option upon the occurrence of certain events,
including the sale of all or substantially

all of the assets or a merger in which we, or a company controlled by Mr. Jones,
is not the surviving corporation. These options would not so vest if the
optionee is retained in his present position and job site after the event.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2000, the Board set the compensation of our executive officers. From
January 1, 2000 through March 14, 2000, the Board was comprised of Messrs.
Jones, Wayne, Lewis, Hartenbaum, Vierra and Burke and Ms. Rico. On March 14,
2000, Mr. Krejci became a member of the Board. Messrs. Jones and Burke, in
addition to serving as directors, also served as directors and officers of a
number of our affiliates during 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT

The following table sets forth certain information as of March 22, 2001,
regarding ownership of our Class A Common Stock, Class B Common Stock and Series
A Convertible Preferred Stock by persons (including any group) known to us to be
beneficial owners of more than 5% of such class of stock, our individual
directors, each of the executive officers named in the Summary Compensation
Table and our executive officers and directors as a group. Under the rules of
the Securities and Exchange Commission, a person (or group of persons) is deemed
to be a "beneficial owner" of a security if he or she, directly or indirectly,
has or shares the power to vote or to direct the voting of such security, or the
power to dispose of or to direct the disposition of such security. Accordingly,
more than one person may be deemed to be a beneficial owner of the same
security. A person is also deemed to be a beneficial owner of any security which
that person has the right to acquire within 60 days.

Series A Convertible
Common Stock Preferred Stock
------------------------------------------------- --------------------------
Class A Class B
---------------------- -----------------------
Percent of Percent of
Total Total
Name and Address of Number of Percent Number of Percent Number of Percent Voting Economic
Beneficial Owner(1)(2) Shares of Class Shares of Class Shares of Class Power Interest
- ---------------------- --------- -------- ---------- -------- --------- -------- ---------- ----------

Glenn R. Jones 4,095,984(3)(4) 74.5% 2,131,400(3)(5) 95.5% 1,600,000(3)(6) 83.4% 90.9% 81.1%
9697 East Mineral Avenue
Englewood, CO 80112
Jeffrey C. Wayne 37,500(7) * -- -- -- -- * *
9697 East Mineral Avenue
Englewood, CO 80112
Jay B. Lewis 31,250(8) * -- -- -- -- * *
9697 East Mineral Avenue
Englewood, CO 80112
Ron Hartenbaum 329,140(9) 6.0 -- -- -- -- 1.1% 3.4%
11 West 42nd Street
New York, NY 10036
Gary Schonfeld 329,140(9) 6.0 -- -- -- -- 1.1% 3.4%
11 West 42nd Street
New York, NY 10036
Tuxedo Shirt, Inc. 658,280(9) 12.0 -- -- -- -- 2.2% 6.9%
11 West 42nd Street
New York, NY 10036
Amy Mickles 2,750(10) * -- -- -- -- * *
9697 East Mineral Avenue
Englewood, CO 80112
Adelphia Communications
Corporation 374,632 6.9 -- -- -- -- 1.3% 3.9%
5 West Third Street
Coudersport, PA 16915
Sandler Capital Management -- -- -- -- 160,000 8.3 * 1.6%
767 Fifth Avenue
New York, NY 10153
All executive officers
and directors
as a group (11 persons) 4,505,999(12) 80.8 2,131,400 95.5 1,600,000 83.4 92.0% 84.7%

* less than one percent

- -------------------

(1) Directors and executive officers named in the Summary Compensation Table
who are not listed in the table do not beneficially own any of our stock.

(2) Unless otherwise noted, all persons indicated in the table have full voting
and investment power with respect to the share ownership described.

(3) Glenn R. Jones is the Chairman of the Board of Directors and Chief
Executive Officer of Jones International and owns all of the outstanding
shares of Jones International. He is therefore deemed to be the beneficial
owner of all our shares owned by Jones International. By virtue of this
ownership, Mr. Jones controls approximately 91% of the total votes to be
cast by all shareholders of our shares on matters not requiring a class
vote. The holders of the Class B Common Stock have the right to convert
their shares of Class B Common Stock into shares of Class A Common Stock on
a share for share basis at any time at their option. The holders of the
Series A Convertible Preferred Stock have the right to convert their shares
of Series A Convertible Preferred Stock into 2,397,500 shares of Class A
Common Stock at any time, and Series A Convertible Preferred Stock must be
converted upon the completion of a public offering of our equity
securities.

(4) Includes 884,108 shares owned by Mr. Jones, 31,250 shares deemed to be held
by Mr. Jones pursuant to a presently exercisable stock option and 3,180,626
shares held by Jones International.

(5) Includes 328,900 shares owned by Mr. Jones and 1,802,500 shares held by
Jones International.

(6) Represents shares held by Jones International Trust LLC, a Colorado limited
liability company. An affiliate of Jones International is the managing
member. Through Mr. Jones' ownership of Jones International, he is deemed
to be the beneficial holder of said shares.

(7) Represents shares deemed to be held by Mr. Wayne pursuant to presently
exercisable stock options.

(8) Represents shares deemed to be held by Mr. Lewis pursuant to a presently
exercisable stock options.

(9) Tuxedo Shirt, Inc. is owned by Messrs. Hartenbaum and Schonfeld, and was
formerly known as MediaAmerica, Inc., the company which sold its
advertising representation business assets to us in 1998. The shares owned
by Tuxedo

Shirt, Inc. are beneficially owned 50% by Mr. Hartenbaum and 50% by Mr.
Schonfeld.

(10) Represents shares deemed to be held by Ms. Mickles pursuant to presently
exercisable stock options.

(11) Includes 112,125 shares deemed to be held by various executive officers and
directors pursuant to presently exercisable stock options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Where applicable, references in this section to amounts paid to or by us
include amounts paid to or by the PIN Venture, an entity that is not wholly
owned, as well as our wholly owned subsidiaries.

ADVANCES

Since our inception, we have received advances from Jones International and
related parties to fund our activities. These advances had no maturity date and
accrued interest at the published prime rate plus 2%. Starting in April 1999,
these amounts were reimbursed from or to Jones International on a monthly basis
and no interest was paid in 2000.

TAX SHARING AGREEMENT

Prior to April 2, 1997, we joined in filing a consolidated Federal tax
return as provided for under the terms of a tax allocation agreement with Jones
International and certain of Jones International's subsidiaries. Pursuant to the
terms of the tax allocation agreement, tax provisions (benefits) were allocated
to the members of the tax sharing group based on their respective pro rata
contribution of taxable income (loss) to Jones International's consolidated
taxable income (loss). As a result of certain stock issuances on April 1, 1997,
less than 80% of our outstanding common stock was owned by Jones International
and, therefore, we no longer join with Jones International in filing a
consolidated Federal tax return. However, we continue to file combined state tax
returns with Jones International in some states, as provided for under the terms
of the tax allocation agreement.

The tax allocation agreement with Jones International gave Jones
International the option to either make a payment of the tax benefits due to the
subsidiary members of the tax sharing group or defer such payments until a
subsequent taxable period in which the subsidiary member generates taxable
income and has a tax payment due either to Jones International or to a federal
or state taxing authority. Jones International could defer such payments for a
period not to exceed five years from the date the tax benefits were incurred and
would accrue interest at the time the deferred amounts originate. For the year
ended December 31, 2000, no state tax benefit (provision) was recognized as a
result of the tax sharing arrangement with Jones International.

SATELLITE SERVICES

We have agreements to provide uplinking, playback, trafficking and related
services to Jones International that terminate on December 31, 2004. We have the
right to terminate the uplinking agreement upon 30-days' written notice. We
received approximately $2,029,000 for these services for the year ended December
31, 2000.

Beginning July 1, 1998, we also provided additional uplinking, playback,
trafficking and related services to Knowledge TV, LLC ("KTV"), a subsidiary of
Jones International, in connection with the lease of an additional channel on
one of our satellite transponders for a monthly fee of $30,000 plus a
proportionate share of expenses. In December 2000, we negotiated with KTV a
termination of these agreements and received a one time termination payment of
approximately $1,553,000, which was calculated based on the value of the
estimated future payments under the agreements, discounted at 11.75% per annum.

SATELLITE TRANSPONDER AGREEMENTS

We lease to Jones International one compressed channel on one of our
satellite transponders. We have the right to terminate the lease at any time
upon 30-days' written notice. The monthly payments may be adjusted periodically
through the December 2004 expiration date based on the number of affiliate
customers using the transponder. We received lease payments of approximately
$1,540,000 for the year ended December 31, 2000.

Effective July 1, 1998, we also leased one additional channel on the
transponder to KTV, at a monthly lease rental of approximately $61,000. In early
1999, KTV sold its subscriber base to a third party and ceased all broadcasting
efforts in early 2000. In December 2000, we negotiated with KTV a termination of
this agreement and certain other agreements described above and received a one
time termination payment in the aggregate amount of approximately $388,000,
which was calculated based on the value of the estimated future payments under
this agreement, discounted at 11.75% per annum.

We subleased from Jones Satellite Holdings, a subsidiary of Jones
International, an audio channel on a non-preemptible satellite transponder on
the Galaxy V communications satellite for approximately $58,000 per month.
Pursuant to our right to terminate this agreement, and concurrent with the
ceasing of broadcasting efforts by Superaudio, we terminated the agreement on
January 31, 2000. Jones Satellite Holdings charged lease payments of $58,000 for
the year ended December 31, 2000.

COMPUTER SERVICES

A subsidiary of Jones International provides computer hardware and software
services and miscellaneous related support services to us and other parties
related to Jones International. We paid service fees to this subsidiary of
approximately $1,260,000 for the year ended December 31, 2000.

OFFICE LEASE AND SUBLEASE

We lease and sublease office space in Englewood, Colorado from parties
related to Jones International on a month-to-month basis. We paid rent and
associated expenses under these leases and subleases of approximately $471,000
for the year ended December 31, 2000.

ADMINISTRATIVE SERVICES

We reimburse Jones International and its related parties for certain
administrative services provided by these companies, such as legal, accounting,
purchasing and human resources services. Jones International and these related
parties charge us for these services based upon an allocation of its personnel
expense associated with providing these services. These allocated expenses
totaled approximately $813,000 for the year ended December 31, 2000.

A subsidiary of Jones International charged us approximately $11,000 for
the year ended December 31, 2000, for usage of its corporate airplane.

GUARANTY OF CREDIT FACILITY

Jones International guaranteed a $20.0 million credit facility in 1999,
which was used to finance the acquisition of Jones Broadcast Programming. Both
the credit facility and guaranty expired in June 2000. As a result of the
guaranty, which was secured, we received more favorable interest and other
terms. On September 30, 1999, we used the proceeds from our Series A Convertible
Preferred Stock offering to repay all amounts outstanding under this credit
facility.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements and Report of Independent Public Accountants.

(a)(2) Schedules.

(a)(3) Exhibits.

The following exhibits, which are numbered in accordance with Item 601 of
Regulation S-K, are filed herewith or, as noted, incorporated by reference
herein:

NUMBER DESCRIPTION
- ------ -----------

3.1 Articles of Incorporation of the Registrant. (1)

3.2 Amendment to the Registrant's Articles of Incorporation filed
September 30, 1999. (4)

3.3 Amended and Restated Articles of Incorporation of the Registrant filed
January 28, 2000.(3)

3.4 Amendment to the Registrant's Amended and Restated Articles of
Incorporation of the Registrant filed December 22, 2000.(5)

3.5 Bylaws of the Registrant.(1)

4.1 Indenture, dated July 10, 1998, between the Registrant and United
States Trust Company of New York.(1)

4.2 Form of Exchange Note is included as Exhibit A-3 to the Indenture.(1)

4.3 Pledge Agreement, dated July 10, 1998, among the Registrant, United
States Trust Company of New York and others.(1)

4.4 Form of Subsidiary Guaranty is included as part of the Indenture.(1)

4.5 Form of Class A Common Stock certificate.(4)

10.1 1998 Stock Option Plan.(1)

10.2 Amendment No. 1 to the Registrant's 1998 Stock Option Plan.(3)

10.3 Form of Basic Incentive Stock Option Agreement.(1)

10.4 Form of Basic Non-Qualified Stock Option Agreement.(1)

10.5 Amendment No. 1 to Option Agreement dated February 10, 2000, between
the Registrant and Jeffrey C. Wayne.(4)

10.6 Amendment No. 1 to Option Agreement dated February 10, 2000, between
the Registrant and Jay B. Lewis.(4)

10.7 Purchase and Sale Agreement dated August 9, 1996, between Jones Global
Group, Inc. and Jones International Networks, Ltd. (n/k/a JPN,
Inc.).(1)

10.8 Exchange Agreement dated September 30, 1996, among Glenn R. Jones,
Jones International, Ltd. and Jones International Networks, Ltd.
(n/k/a JPN, Inc.).(1)

10.9 Agreement and its amendment, dated November 6, 1996 and April 1, 1997,
respectively, between Glenn R. Jones and Jones International Networks,
Ltd. (n/k/a JPN, Inc.).(1)

10.10+ Second Amended and Restated Partnership Agreement of Product
Information Network Venture dated April 1, 1997, among Jones
Infomercial Network Ventures, Inc., Cox Consumer Information Network,
Inc. and Adelphia Communications Corporation.(1)

10.11 Affiliate Agreement dated January 1, 1996, among Great American
Country, Inc., Jones Programming Services, Inc. and Jones Intercable,
Inc.(1)

10.12 Amended and Restated Affiliate Agreement dated August 1, 1994, between
Jones Infomercial Networks, Inc. and Jones Intercable, Inc., together
with an Assignment dated January 31, 1995, between Jones Infomercial
Networks, Inc. and Jones Infomercial Network Ventures, Inc.(1)

10.13+ Affiliate Agreement dated January 31, 1995, between Product
Information Network Venture and Cox Communications, Inc.(1)

10.14+ Affiliate Agreement as Amended, dated October 1, 1995 as amended
effective April 1, 1997, between Product Information Network Venture
and Adelphia Communications Corporation.(1)

10.15 Uplink Services Agreement dated January 1, 1995, among Jones Earth
Segment, Inc., Jones Infomercial Networks, Inc., Jones Computer
Network, Ltd., Mind Extension University, Inc. (n/k/a Knowledge TV,
Inc.) and Jones Galactic Radio, Inc., together with a letter agreement
dated June 10, 1998, between Jones Earth Segment, Inc. and Knowledge
TV, Inc.(1)

10.16 Services Agreement dated January 1, 1995, among Jones Earth Segment,
Inc., Jones Infomercial Networks, Inc., Jones Computer Network, Ltd.
and Mind Extension University, Inc. (n/k/a Knowledge TV, Inc.),
together with a letter agreement dated June 10, 1998, between Jones
Earth Segment, Inc. and Knowledge TV, Inc.(1)

10.17 Transponder Licenses Agreement dated January 1, 1995, among Jones
Space Segment, Inc., Jones Infomercial Networks, Inc. and Jones
Computer Network, Ltd., together with a letter agreement dated June
10, 1998, between Jones Space Holdings, Inc. and Knowledge TV, Inc.(1)

10.18 Transponder Licenses Agreement dated January 1, 1995, among Jones
Satellite Holdings, Inc., Jones Galactic Radio, Inc. and Mind
Extension University, Inc. (n/k/a Knowledge TV, Inc.).(1)

10.19+ C-3/C-4 Satellite Transponder Service Agreement dated July 28, 1989,
between GE American Communications, Inc. and Jones Space Segment,
Inc.(1)

10.20 Agreement dated June 2, 1998, among MediaAmerica, Inc., Ron
Hartenbaum, Gary Schonfeld, Jones Network Holdings LLC and the
Registrant.(1)

10.21 Post-Closing Agreement dated July 10, 1998, with MediaAmerica, Inc.,
Gary Schonfeld and Ron Hartenbaum.(1)

10.22 Employment Agreement dated July 10, 1998, between Ron Hartenbaum and
the Registrant.(1)

10.23 Employment Agreement dated July 10, 1998, between Gary Schonfeld and
the Registrant.(1)

10.24 Agreement dated as of June 15, 1999 among Broadcast Electronics, Inc.,
BEI Holding Corporation and the Registrant.(2)

10.25 Revolving Credit Facility dated as of July 29, 1999 between Bank of
America, N.A. and the Registrant.(2)

10.26 Form of Registration Rights Agreement dated as of October 1, 1999
between the Registrant and certain holders of Series A Convertible
Preferred Stock.(4)

10.27 Termination Agreement dated as of December 20, 2000 between Knowledge
TV, LLC and the Registrant.

21 Subsidiaries.

- -------------------

+ Portions of this exhibit have been omitted based on a determination dated
November 3, 1998 by the Securities and Exchange Commission that certain
information contained therein shall be afforded confidential treatment.

(1) Incorporated by reference from the Registrant's Registration Statement No.
333-62077 on Form S-4 filed on August 21, 1998.

(2) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated August 6, 1999.

(3) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated January 28, 2000.

(4) Incorporated by reference from the Registrant's Registration Statement No.
333-93337 on Form S-1 filed on December 22, 1999, and Amendment No. 1
thereto, filed on February 18, 2000.

(5) Incorporated by reference from the Registrant's Current Report on Form 8-K
dated December 22, 2000.

(b) Reports on Form 8-K

Current Report on Form 8-K dated December 22, 2000 indicating that the
shareholders of the Registrant approved that the Registrant's Articles of
Incorporation be amended to change the name of the Registrant to "Jones
Media Networks, Ltd."

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 MEDIA NETWORKS, LTD.

Dated: March 23, 2001 By: /s/ Jeffrey C. Wayne
----------------------
Jeffrey C. Wayne
President

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.

Dated: March 23, 2001 By: /s/ Glenn R. Jones
------------------------------------
Glenn R. Jones
Chairman of the Board of Directors

Dated: March 23, 2001 By: /s/ Jeffrey C. Wayne
------------------------------------
Jeffrey C. Wayne
President and Director
(Principal Executive Officer)

Dated: March 23, 2001 By: /s/ Jay B. Lewis
------------------------------------
Jay B. Lewis Group
Vice President/Finance and Director
(Chief Financial Officer)

Dated: March 23, 2001 By: /s/ Amy Mickles
------------------------------------
Amy Mickles
Controller
(Chief Accounting Officer)

Dated: March 23, 2001 By: /s/ Ronald Hartenbaum
------------------------------------
Ronald Hartenbaum
Director

Dated: March 23, 2001 By: /s/ Yrma G. Rico
------------------------------------
Yrma G. Rico
Director

Dated: March 23, 2001 By: /s/ Timothy J. Burke
------------------------------------
Timothy J. Burke
Director

Dated: March 23, 2001 By: /s/ James J. Krejci
------------------------------------
James J. Krejci
Director

By:
------------------------------------
Fred A. Vierra
Director