SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
IDS/JONES GROWTH PARTNERS 87-A, LTD.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: Limited
Partnership Interests
(2) Aggregate number of securities to which transaction applies: 164,178
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): Pursuant to
Rule 0-11(c)(2), the transaction valuation is based upon the $30,900,000
sales price that is to be paid to IDS/Jones Growth Partners 87-A, Ltd.
in connection with the transaction that is the subject of the proxy
solicitation.
(4) Proposed maximum aggregate value of the transaction: $30,900,000
(5) Total fee paid: $6,180
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
[JONES INTERCABLE LOGO APPEARS HERE]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
NOTICE OF VOTE OF THE LIMITED PARTNERS OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
To the Limited Partners of IDS/Jones Growth Partners 87-A, Ltd.:
A special vote of the limited partners of IDS/Jones Growth Partners 87-A,
Ltd. (the "Partnership") is being conducted through the mails on behalf of the
Partnership by Jones Cable Corporation, the managing general partner of the
Partnership, for the purpose of obtaining limited partner approval of the
sale, to an unaffiliated third party, of the Partnership's cable television
system serving the community of Roseville and certain portions of
unincorporated Placer County, all in the state of California (the "Roseville
System"), for $30,900,000 in cash, subject to normal working capital closing
adjustments that may have the effect of increasing or reducing the purchase
price by a non-material amount. Information relating to this matter is set
forth in the accompanying proxy statement.
If the limited partners approve the proposed sale of the Roseville System
and if the transaction is closed, the Partnership will distribute the net sale
proceeds to its limited partners of record as of April 30, 1997, and it is
estimated that the Partnership will distribute to the limited partners $118
for each $250 limited partnership interest, or $472 for each $1,000 invested
in the Partnership. Distributions will be net of California non-resident
withholding, if applicable, and distribution checks will be issued to limited
partners' account registration or payment instruction of record. Once the
distribution of the net proceeds from the sale of the Roseville System has
been made, limited partners will have received a total of $301 for each $250
limited partnership interest, or $1,203 for each $1,000 invested in the
Partnership, taking into account the prior distribution to limited partners
made in 1996.
Only limited partners of record at the close of business on February 28,
1997 are entitled to notice of, and to participate in, this vote of limited
partners. It is very important that all limited partners participate in the
voting. The Partnership's ability to complete the transaction discussed in the
Proxy Statement and the Partnership's ability to make a distribution to its
partners of the net proceeds of the sale of the Partnership's Roseville System
are dependent upon the approval of the transaction by the holders of a
majority of the Partnership's limited partnership interests.
The proposal that is the subject of this proxy solicitation will be adopted
only if approved by the holders of a majority of the limited partnership
interests. Each limited partnership interest entitles the holder thereof to
one vote on the proposal. Because the Partnership's limited partnership
agreement (the "Partnership Agreement") requires that the proposal to sell the
Roseville System be approved by the holders of a majority of the limited
partnership interests, abstentions and non-votes will be treated as votes
against the proposal. A properly executed consent returned to the managing
general partner on which a limited partner does not mark a vote will be
counted as a vote for the proposed sale of the Roseville System. Because
limited partners do not have dissenters' or appraisal rights in connection
with the proposed sale of the Roseville System, if the holders of a majority
of the limited partnership interests approve the proposal, all limited
partners will receive a distribution of the net sale proceeds in accordance
with the procedures prescribed by the Partnership Agreement regardless of how
or whether they vote on the proposal.
Jones Cable Corporation, as managing general partner of the Partnership,
urges you to sign and return the enclosed proxy as promptly as possible. The
proxy should be returned in the enclosed envelope.
JONES CABLE CORPORATION
Managing General Partner
[SIGNATURE OF ELIZABETH M. STEELE APPEARS HERE]
Elizabeth M. Steele
Secretary
Dated: March 31, 1997
[JONES INTERCABLE LOGO APPEARS HERE]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY STATEMENT
VOTE OF THE LIMITED PARTNERS
OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
This Proxy Statement is being furnished in connection with the solicitation
of the written consents of the limited partners of IDS/Jones Growth Partners
87-A, Ltd. (the "Partnership") by Jones Cable Corporation, the managing
general partner of the Partnership (the "Managing General Partner"), on behalf
of the Partnership, for the purpose of obtaining limited partner approval of
the sale of the Partnership's cable television system serving the community of
Roseville and certain portions of unincorporated Placer County, all in the
state of California (the "Roseville System") for $30,900,000 in cash, subject
to normal working capital closing adjustments, to Roseville Cable Company, a
California corporation (the "Purchaser"). The Partnership's supervising
general partner is IDS Cable Corporation (the "Supervising General Partner")
and the Managing General Partner and the Supervising General Partner are
referred to in this Proxy Statement collectively as the "General Partners."
The Purchaser is not affiliated with the Partnership or with either of the
General Partners.
Proxies in the form enclosed, properly executed and duly returned, will be
voted in accordance with the instructions thereon. Limited partners are urged
to sign and return the enclosed proxy as promptly as possible. Proxies cannot
be revoked except by delivery of a proxy dated as of a later date. Officers
and other employees of the Managing General Partner may solicit proxies by
mail, by fax, by telephone or by personal interview. The deadline for the
receipt of proxy votes is April 25, 1997, unless extended, but the vote of the
Partnership's limited partners will be deemed to be concluded on the date that
the Managing General Partner, on behalf of the Partnership, is in receipt of
proxies executed by the holders of a majority of the limited partnership
interests either consenting to or disapproving of the proposed transaction.
The cost of the proxy solicitation will be paid by the Partnership.
The Partnership has only one class of limited partners and no limited
partner has a right of priority over any other limited partner. The
participation of the limited partners is divided into limited partnership
interests and each limited partner owns one limited partnership interest for
each $250 of capital contributed to the Partnership.
As of January 31, 1997, the Partnership had 164,178 limited partnership
interests outstanding, held by approximately 6,342 persons. There is no
established trading market for such interests. To the best of the Managing
General Partner's knowledge, no person or group of persons beneficially own
more than five percent of the limited partnership interests. The Managing
General Partner owns 200 limited partnership interests and the Supervising
General Partner owns 100 limited partnership interests. In addition, IDS
Management Corporation, an affiliate of the Supervising General Partner, owns
564 limited partnership interests. These limited partnership interests owned
by the General Partners and IDS Management Corporation will be voted in favor
of the sale of the Roseville System to the Purchaser. Officers and directors
of the General Partners do not own any limited partnership interests. Only
limited partners of record at the close of business on February 28, 1997 will
be entitled to notice of, and to participate in, the vote.
Upon the consummation of the proposed sale of the Roseville System, the
Partnership will pay all of its indebtedness, which totalled approximately
$9,850,000 at September 30, 1996, and brokerage fees totalling $772,500, and
then the Partnership will distribute the net sale proceeds to its limited
partners of record as of April 30, 1997. Because $1,550,000 of the sale
proceeds will remain in escrow for one year following the closing date, this
portion of the net sale proceeds will not be distributed to limited partners
until 1998, if at all. Because limited partners will not receive distributions
in an amount equal to 125 percent of the capital initially contributed to the
Partnership by the limited partners, the General Partners will not receive any
of the net proceeds from the Roseville System's sale. Based upon pro forma
financial information as of September 30, 1996, as a result of the Roseville
System's sale, the limited partners of the Partnership, as a group, will
receive approximately $19,357,004. Limited partners will receive $118 for each
$250 limited partnership interest, or $472 for each $1,000 invested in the
Partnership, from the net proceeds of the Roseville System's sale.
Distributions will be net of California non-resident withholding, if
applicable, and distribution checks will be issued to limited partners'
account registration or payment instruction of record. See "Federal Income Tax
Consequences." Once the net proceeds from the sale of the Roseville System
have been distributed to the limited partners, the limited partners will have
received a total of $301 for each $250 limited partnership interest, a $1,203
for each $1,000 invested in the Partnership, taking into account the prior
distribution to limited partners made in 1996.
The proposal that is the subject of this proxy solicitation will be adopted
only if approved by the holders of a majority of the limited partnership
interests. Each limited partnership interest entitles the holder thereof to
one vote on the proposal. Because the Partnership's limited partnership
agreement (the "Partnership Agreement") requires that the proposal to sell the
Roseville System be approved by the holders of a majority of the limited
partnership interests, abstentions and non-votes will be treated as votes
against the proposal. A properly executed consent returned to the Managing
General Partner on which a limited partner does not mark a vote will be
counted as a vote for the proposed sale of the Roseville System. Because
limited partners do not have dissenters' or appraisal rights in connection
with the proposed sale of the Roseville System, if the holders of a majority
of the limited partnership interests approve the proposal, all limited
partners will receive a distribution of the net sale proceeds in accordance
with the procedures prescribed by the Partnership Agreement regardless of how
or whether they vote on the proposal.
The Boards of Directors of the General Partners have approved the proposed
sale of the Roseville System and the General Partners recommend approval of
the transaction by the holders of the Partnership's limited partnership
interests.
The approximate date on which this Proxy Statement and Form of Proxy are
being sent to limited partners is March 31, 1997.
PARTNERSHIP INFORMATION
THE PARTNERSHIP'S INVESTMENT OBJECTIVES
The Partnership was formed to acquire, develop, operate and, ultimately,
sell cable television systems. The primary objectives of the Partnership have
been to obtain capital appreciation in the value of the Partnership's cable
television properties; to obtain equity build-up through debt reduction; and
to generate tax losses that could be utilized to offset passive income. It has
been contemplated from the outset of the Partnership's existence that capital
appreciation in Partnership cable television properties would be converted to
cash by a sale of such properties at such time as the General Partners
determined that the Partnership's investment objectives had substantially been
achieved.
The Partnership was formed in September 1987 as a Colorado limited
partnership in connection with a public offering of its limited partnership
interests. Since its formation, the Partnership has engaged primarily in the
ownership and operation of the Roseville System and the cable television
system serving areas in and around Carmel, Indiana (the "Carmel System"). The
Carmel System was sold in February 1996 to an affiliate of the Managing
General Partner for a sales price of $44,235,333, which price represented the
average of three separate,
2
independent appraisals of the fair market value of the Carmel System. A
portion of the sale proceeds, $14,235,333, was used to reduce Partnership
debt, and the remainder of the sale proceeds, $30,000,000, was distributed to
the limited partners of the Partnership in April 1996. The distribution of the
net proceeds from the sale of the Carmel System resulted in the Partnership's
limited partners receiving a return of $183 for each $250 limited partnership
interest, or $731 for each $1,000 invested in the Partnership. No vote of the
limited partners of the Partnership was required in connection with the sale
of the Carmel System because the assets of the Carmel System did not
constitute all or substantially all of the Partnership's assets. The
Supervising General Partner consented to the timing of the sale of the Carmel
System and participated in the selection of the firms that conducted the
appraisals of the Carmel System.
The purpose of the sale of the Roseville System, from the Partnership's
perspective, is to attain the Partnership's primary investment objective,
i.e., to convert the Partnership's capital appreciation in the Roseville
System to cash. The sale proceeds will be used to repay all outstanding
indebtedness of the Partnership, and the remaining sale proceeds will be
distributed to the limited partners of the Partnership in accordance with the
distribution procedures established by the Partnership Agreement. The sale of
the Roseville System is thus the necessary final step in the Partnership's
accomplishment of its investment objectives with respect to the Roseville
System.
VOTING PROVISION OF THE PARTNERSHIP AGREEMENT
Section 2.2(k) of the Partnership Agreement provides that the sale of all or
substantially all of the Partnership's assets is subject to the approval of
the holders of a majority of the Partnership's limited partnership interests.
Because the Roseville System represents all of the Partnership's remaining
assets, the proposed sale of the Roseville System to the Purchaser is being
submitted for limited partner approval.
PROPOSED SALE OF ASSETS
GENERAL
Pursuant to the terms and conditions of an asset purchase agreement dated as
of October 14, 1996, as amended (the "Purchase and Sale Agreement") by and
between the Partnership and the Purchaser, the Partnership has agreed to sell
the Roseville System to the Purchaser for a sales price of $30,900,000,
subject to normal working capital closing adjustments. The Purchaser,
Roseville Cable Company, is a California corporation headquartered at 211
Lincoln Street, Roseville, California 95678. The Purchaser is not affiliated
with the Partnership or with either of the General Partners. The Partnership
has been informed that the Purchaser intends to finance its acquisition of the
Roseville System through cash on hand.
THE CLOSING
The closing of the sale will occur on the first occurrence of the last
business day of a calendar month after all of the closing conditions set forth
in the Purchase and Sale Agreement have been satisfied or waived. It is
anticipated that the closing will occur during the second calendar quarter of
1997. Because the closing is conditioned upon, among other things, the
approval of the limited partners and the receipt of material third party
consents necessary for the transfer of the Roseville System to the Purchaser,
there can be no assurance that the proposed sale will occur. If all conditions
precedent to the Purchaser's obligation to close are not satisfied or waived
by June 30, 1997, either party may terminate the Purchase and Sale Agreement
and its obligations thereunder by giving notice thereof to the other party.
THE ROSEVILLE SYSTEM
The assets to be acquired by the Purchaser consist primarily of the tangible
and intangible assets of the Roseville System. The Roseville System was
purchased by the Partnership in April 1988 for an aggregate purchase price of
$20,363,000.
3
At the date of acquisition in April 1988, the Roseville System served
approximately 7,600 basic subscribers using cable plant passing approximately
13,000 homes. As of December 31, 1996, the Roseville System served
approximately 16,500 basic subscribers using cable plant passing approximately
22,000 homes.
The Purchaser will purchase all of the tangible assets of the Roseville
System that are leased or owned by the Partnership and used in the operation
of the system, including the system's real estate, vehicles, headend
equipment, underground and aboveground cable distribution systems, towers,
earth satellite receive stations and furniture and fixtures. The Purchaser
also will acquire certain of the intangible assets of the system, including
all of the franchises, leases, agreements, permits, licenses and other
contracts and contract rights necessary for the operation of the system. Also
included in the sale are the subscriber accounts receivable of the system and
all of the system's records, files, schematics, maps, reports, promotional
graphics, marketing materials and reports filed with federal, state and local
regulatory agencies. The foregoing notwithstanding, certain of the Roseville
System's assets will be retained by the Partnership, including cash or cash
equivalents on hand and in banks, insurance policies, and any federal, state
or local income or other tax refunds to which the Partnership may be entitled.
PURCHASE PRICE
Subject to the adjustments described below, the purchase price for the
Roseville System is $30,900,000. The purchase price will be reduced if at
closing the number of basic subscribers is less than 16,800 (the "Subscriber
Threshold"), or if the Roseville System's 1996 annualized gross revenues are
less than $7,175,120 (the "Revenues Threshold"). The purchase price reduction
is to be the greater of (i) the product of $1,845 multiplied by the number of
basic subscribers on the closing date less than the Subscriber Threshold or
(ii) the product of 2.15 and the amount by which 1996 annualized gross
revenues are less than the Revenues Threshold. If on the closing date the
number of basic subscribers exceeds the Subscriber Threshold or the Roseville
System's 1996 annualized gross revenues exceed the Revenues Threshold, then
the purchase price reduction described above is to be offset by the amount of
the overage of the pertinent threshold. If on the closing date the number of
basic subscribers exceeds the Subscriber Threshold and the Roseville System's
1996 annualized gross revenues exceed the Revenues Threshold, then the
purchase price is to be increased by the product of (i) 2.15 and (ii) the
excess of 1996 annualized gross revenues under the Revenues Threshold, but in
no event is such increase in the purchase price permitted to be greater than
$2,000,000. Based upon year end financial information, the Roseville System's
1996 annualized gross revenues were $7,213,953, meaning that the Roseville
System's 1996 annualized gross revenues exceeded the Revenues Threshold.
In addition, prorations will be made at closing to reflect the principle
that all liabilities, expenses and income attributable to the Roseville System
for the period on and prior to the closing date are for the account of the
Partnership and all liabilities, expenses and income attributable to the
Roseville System for the period subsequent to the closing date are for the
account of the Purchaser. Subscriber and other revenue represented by accounts
receivable shall be prorated for the account of the Partnership to the extent
that such accounts receivable have been outstanding less than 61 days as of
the closing date and the aggregate amount of such accounts receivable will be
reduced by 5%. Other items to be prorated will include copyright, pole
attachment and other fees or charges arising under any of the Roseville
System's franchises and contracts, all real and personal property taxes levied
or assessed against the assets of the Roseville System and all assessments and
excise taxes payable with regard to cable television services and related
sales to subscribers to the system, rents, utilities and similar recurring
expenses, wages, salaries, payroll taxes (other than withholding taxes) and
fringe benefits of employees who continue in the employ of the Purchaser after
the closing date, accrued vacation of such employees and any income or expense
under any contract assumed by the Purchaser. All advance payments to, or
monies of, third parties on deposit with the Partnership relating to the
Roseville System including without limitation advanced payments and deposits
by subscribers for converters, encoders, cable television services or related
sales, will be retained by the Partnership and credited to the account of the
Purchaser. The Managing General Partner believes that these closing
adjustments will neither increase nor decrease the purchase price by a
material amount. Please see Note 3 of the Notes to Unaudited Pro Forma
Financial Statements for a detailed accounting of the estimated closing
adjustments.
4
INDEMNITY ESCROW
For a period of one year following the closing date, $1,550,000 of the sale
proceeds will remain in escrow as security for the Partnership's agreement to
indemnify the Purchaser under the Purchase and Sale Agreement. Any amounts
remaining from this indemnity escrow account at the end of the one year period
will be distributed to limited partners of the Partnership at that time. The
Partnership thus will continue in existence at least until any amounts
remaining from the indemnity escrow account have been distributed in 1998. If
any disputes with respect to indemnification arise, the Partnership would not
be dissolved until such disputes were resolved, which could result in the
Partnership continuing in existence beyond 1998.
CONDITIONS TO CLOSING
The obligations of the Partnership and the Purchaser are conditioned upon
the approval by the City of Roseville and the County of Placer to the transfer
to the Purchaser of the respective cable television franchises granted by such
governmental entities to the Partnership. The County of Placer granted its
consent to the transfer of the county franchise in December 1996 and the City
of Roseville is expected to grant its consent to the transfer of the city
franchise during the first quarter of 1997. In addition, the obligations of
the Partnership and the Purchaser to consummate the transaction are
conditioned upon the expiration or termination of the waiting period
specified in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("Hart-
Scott-Rodino") and the rules and regulations thereunder. In response to their
Hart-Scott-Rodino filings, the Partnership and the Purchaser have received a
second request for information about the proposed sale of the Roseville System
from the United States Department of Justice. The Partnership and the
Purchaser will have to satisfy certain concerns of the Department of Justice
about the potential anti-competitive effects of the transaction before the
Partnership will be permitted to close the sale of the Roseville System to the
Purchaser. The Partnership cannot predict if or when the concerns of the
Department of Justice will be satisfied. In addition, because the Purchaser is
affiliated with the company that provides telephone services in the
geographical area in which the Roseville System provides cable television
services, a waiver from the Federal Communications Commission of Section 652
of the Telecommunications Act of 1996, which prohibits the acquisition by a
telephone company and its affiliates of cable systems in the telephone
company's service area, is necessary to permit the Purchaser to consummate the
purchase of the Roseville System. The waiver from the Federal Communications
Commission is anticipated to be received in the first quarter of 1997.
In addition, the Purchaser's obligations under the Purchase and Sale
Agreement are subject to the following additional conditions: (a) the
Partnership shall have performed and complied in all respects with all
covenants, conditions and obligations required by the Purchase and Sale
Agreement to be performed or complied with by the Partnership on or before the
closing date; (b) all representations and warranties of the Partnership,
including without limitation those made to the knowledge of the Partnership,
contained in the Purchase and Sale Agreement, the exhibits to the Purchase and
Sale Agreement or in any other document, instrument or certificate that is to
be delivered by the Partnership to the Purchaser under the Purchase and Sale
Agreement shall be true, correct and complete in all material respects at and
as of the closing date; (c) the cable television franchises necessary to own
and operate the Roseville System shall be assigned to the Purchaser and,
except to the extent waived by the Purchaser, shall contain terms no more
burdensome or less favorable than those afforded the Partnership under the
franchises as in force and effect as of the date of the Purchase and Sale
Agreement; (d) there shall not have occurred any material adverse change in
the Roseville System or its financial condition, taken as a whole, other than
change arising out of matters of a general economic nature or matters
affecting the cable industry generally, and the Partnership shall not have
sustained any loss or damage to the assets of the Roseville System, whether or
not insured, that materially affects its ability to conduct the business of
the Roseville System; (e) the consents and approvals necessary for the
Partnership to transfer to the Purchaser all material contracts of the
Roseville System shall have been obtained; (f) no action or proceeding shall
be completed or pending against the Partnership or the Purchaser that has or
is likely to result in a judgment, decree or order that would prevent or make
unlawful the consummation of the sale of the Roseville System and there shall
be in effect no order restraining or prohibiting the consummation of the sale
of the Roseville System.
The Partnership's obligations under the Purchase and Sale Agreement are
subject to the following additional conditions: (a) the Purchaser shall have
performed and complied in all respects with all covenants, conditions
5
and obligations required by the Purchase and Sale Agreement to be performed or
complied with by the Purchaser on or before the closing date; (b) all
representations and warranties made by the Purchaser, including without
limitation those made to the knowledge of the Purchaser, contained in the
Purchase and Sale Agreement, the exhibits to the Purchase and Sale Agreement
or in any other document, instrument or certificate that shall be delivered by
the Purchaser to the Partnership under the Purchase and Sale Agreement shall
be true, correct and complete in all material respects at and as of the
closing date; (c) the consents and approvals necessary for the Partnership to
transfer the Roseville System to the Purchaser shall have been received in
form and substance reasonably satisfactory to the Partnership and its counsel;
(d) no action or proceeding shall be completed or pending against the
Partnership or the Purchaser that has or is likely to result in a judgment,
decree or order that would prevent or make unlawful the consummation of the
sale of the Roseville System and there shall be in effect no order restraining
or prohibiting the consummation of the sale of the Roseville System.
In addition, if the adjustment to the purchase price based on the Subscriber
Threshold and/or the Revenues Threshold described above shall result in a
purchase price of less than $29,450,000, the Partnership will have the right,
but not the obligation, to consummate the sale of the Roseville System to the
Purchaser.
BROKERAGE FEE
As permitted by Section 2.2(n)(i) of the Partnership Agreement, which
provides for the payment by the Partnership of brokerage fees to The Jones
Group, Ltd. and IDS Management Corporation, affiliates of the General
Partners, in an amount not to exceed a total of 2.5 percent of the sales price
of a cable television system sold by the Partnership to an unaffiliated party,
the Partnership will pay The Jones Group, Ltd. and IDS Management Corporation
aggregate fees of $772,500 upon the completion of the sale of the Roseville
System to the Purchaser as compensation to such firms for acting as the
Partnership's brokers and financial advisors in connection with the sale of
the Roseville System to the Purchaser. The $772,500 in fees represents 2.5
percent of the $30,900,000 sales price and will be shared equally by such
firms.
REASONS FOR THE SALE
The decision to proceed with the sale of the Roseville System at this time
was based upon the General Partners' determination that the Partnership has
achieved its investment objectives with respect to the Roseville System. The
Roseville System has appreciated in value during the holding period.
When investing in the Partnership, by virtue of the provisions of the
Partnership Agreement, the limited partners vested in the General Partners the
right and the responsibility to determine when the Partnership's investment
objectives had been achieved. The Roseville System was acquired because, in
the opinion of the General Partners at the time of the Roseville System's
acquisition, it had the potential for capital appreciation within a reasonable
period of time. It is the General Partners' opinion that during the almost ten
years that the Roseville System has been held by the Partnership, the
Partnership's investment objectives with respect to the Roseville System have
been achieved.
The General Partners generally considered the benefits to the limited
partners that might be derived by holding the Roseville System for an
additional period of time. The General Partners assumed that the Roseville
System probably would continue to appreciate in value and that as a result the
Roseville System might be able to be sold for a greater sales price in the
future. The General Partners weighed these assumptions against the potential
risks to investors from a longer holding period, i.e., the risks that
regulatory, technology and/or competitive developments could cause the
Roseville System to decline in value, which would result in a lesser sales
price in the future. Weighing all of these factors, the General Partners
concluded that now rather than later was the time to sell the Roseville
System.
CERTAIN EFFECTS OF THE SALE
Upon consummation of the sale of the Roseville System, the proceeds of the
sale will be used to repay all indebtedness of the Partnership and brokerage
fees, and then the Partnership will distribute the remaining net
6
sale proceeds to the limited partners pursuant to the terms of the Partnership
Agreement. Because $1,550,000 of the sale proceeds will remain in escrow for
one year following the closing date, this portion of the net sale proceeds
will not be distributed to limited partners until 1998, if at all. Because
limited partners will not receive distributions in an amount equal to 125
percent of the capital initially contributed to the Partnership by the limited
partners, the General Partners will not receive any of the net proceeds from
the Roseville System's sale. Based upon the pro forma financial information as
of September 30, 1996, as a result of this distribution, the limited partners
of the Partnership, as a group, will receive approximately $19,357,004. The
limited partners will be subject to federal income tax on the income resulting
from the sale of the Roseville System. See the detailed information below
under the caption "Federal Income Tax Consequences."
After the sale of the Roseville System and the distribution of the net
proceeds therefrom, including the indemnity escrow amount, the Partnership
will be liquidated and dissolved, most likely in 1998. Neither Colorado law
nor the Partnership Agreement afford dissenters' or appraisal rights to
limited partners in connection with the proposed sale of the Roseville System.
If the proposed transaction is approved by the holders of a majority of
limited partnership interests, all limited partners will receive a
distribution in accordance with the procedures prescribed by the Partnership
Agreement regardless of how or whether they vote on the proposal. It is
anticipated that if the proposed transaction is not consummated, the Managing
General Partner's current management team will continue to manage the
Roseville System on behalf of the Partnership until such time as the Roseville
System can be sold.
FEDERAL INCOME TAX CONSEQUENCES
The purpose of the following discussion of the income tax consequences of
the proposed transaction is to inform the limited partners of the Partnership
of the federal income tax consequences to the Partnership and to its partners
arising from the sale of the Roseville System. The tax information included
herein was prepared by the tax department of the Managing General Partner. The
tax information is taken from tax data compiled by the Managing General
Partner in its role as the Partnership's tax administrator and is not based
upon the advice or formal opinion of counsel. The tax discussion that follows
is merely intended to inform the limited partners of factual information and
should not be considered tax advice.
By the expected date of the Roseville System's sale, the limited partners
will have been allocated ordinary taxable losses of approximately $33,924,758
($827 per $1,000 invested). Application of the passive activity loss rules has
limited these deductible losses in prior years and created passive loss
carryovers to the year of sale. A portion of these passive losses were
utilized to totally offset the gain from sale of the Partnership's Carmel,
Indiana cable system in 1996. The gain on sale of the Roseville System
incorporates the estimated remaining passive loss carryforwards of $6,766,740
($165 per $1,000 invested) that are presumed deductible in the year of sale.
The sale of the Roseville System will result in a gain for federal income
tax purposes. The amount of this gain allocated to limited partners is
approximately $15,970,592 ($389 per $1,000 invested). The Managing General
Partner estimates that all of this gain will be treated as ordinary income.
This ordinary income characterization results from the recapture of
depreciation on personal property under Section 1245. The Managing General
Partner does not estimate any of the gain will be treated as long term capital
gain under Section 1231.
Assuming the 31 percent rate applies to ordinary income and a 28 percent
rate applies to long term capital gain, as a result of the sale of the
Roseville System, a limited partner will be subject to federal income taxes of
$121 per $1,000 invested in the Partnership. The taxable income will be
recognized in the year of the closing of the sale, which is expected to be
1997. Because $1,550,000 of the sale proceeds will remain in escrow (as
security for the Partnership's agreement to indemnify the Purchaser under the
Purchase and Sale Agreement) for a period of one year from the closing date,
the Partnership will continue in existence at least until any amounts
remaining from this indemnity escrow account at the end of the one year period
have been distributed. Limited partners thus will receive, in March 1999, a
1998 Schedule K-1.
7
The distribution of the proceeds from the sale of the Roseville System that
will remain in the indemnity escrow account until 1998 will cause the
liquidation of the Partnership, which will result in an additional tax
deduction for the limited partners. The final capital account balance reported
on the 1998 Schedule K-1 of each limited partner will reflect a positive
ending capital account balance that is projected to equal $116 per $1,000
invested. This amount represents partnership syndication costs that may be
deducted on the limited partners' tax return as a long term capital loss under
Section 731. The deduction of long term capital losses may be limited
depending on each partners' specific income tax situation.
Limited partners who are non-resident aliens or foreign corporations
("foreign persons") are subject to a withholding tax on their share of the
Partnership's income from the sale of the Roseville System. The withholding
rates are 39.6 percent for individual partners and 35 percent for corporate
partners. The tax withheld will be remitted to the Internal Revenue Service
and the foreign person will receive a credit on their U.S. tax return for the
amount of the tax withheld by the Partnership. The tax withheld will be
treated as a distribution to the limited partner.
The state of California requires that state tax withholding occur on
California source income of non-resident partners of the Partnership. The
amount of tax withheld is calculated on the current year allocable income
without benefit of net operating loss carryforwards. Withholding is not
required on tax exempt limited partners. The rate of withholding is 7 percent
on all domestic non-resident partner distributions and 9.3 percent on foreign
non-resident partner distributions. The withholding process will require
affected partners to file non-resident income tax returns in California. Blank
forms and instructions will be provided in your annual tax packet by the
Managing General Partner to assist in this reporting requirement.
CERTAIN INFORMATION ABOUT THE PARTNERSHIP, THE GENERAL
PARTNERS AND THE PURCHASER OF THE SYSTEM
The principal executive offices of the Partnership and the Managing General
Partner are located at 9697 East Mineral Avenue, Englewood, Colorado 80112,
and their telephone number is (303) 792-3111. The principal executive offices
of the Supervising General Partners are located at IDS Tower 10, 733 Marquette
Avenue, Minneapolis, Minnesota 55402, and its telephone number is (612) 671-
. The principal executive offices of the Purchaser are located at 211
Lincoln Street, Roseville, California 95678.
The limited partnership interests of the Partnership are registered pursuant
to Section 12(g) of the Exchange Act. As such, the Partnership currently is
subject to the informational reporting requirements of the Exchange Act and,
in accordance therewith, is obligated to file periodic reports, proxy
statements and other information with the Securities and Exchange Commission
relating to its business, financial condition and other matters. Reports and
other information filed by the Partnership can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and at the following regional offices
of the Commission: 7 World Trade Center, Suite 1300, New York, New York 10048
and Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. After the net proceeds from the sale of the Roseville System,
including the indemnity escrow amount, finally are distributed to the
Partnership's limited partners, the Partnership will be liquidated and
dissolved. The Partnership's registration and reporting requirements under the
Exchange Act will be terminated upon the dissolution of the Partnership.
8
USE OF PROCEEDS FROM THE ROSEVILLE SYSTEM'S SALE
The following is a brief summary of the Partnership's estimated use of the
proceeds from the sale of the Roseville System. All of the following selected
financial information is based upon amounts as of September 30, 1996 and
certain estimates of liabilities at closing. Final results may differ from
these estimates. A more detailed discussion of the financial consequences of
the sale of the system is set forth below under the caption "Unaudited Pro
Forma Financial Information." All limited partners are encouraged to review
carefully the unaudited pro forma financial statements and notes thereto.
If the holders of a majority of limited partnership interests of the
Partnership approve the proposed sale of the Roseville System and the
transaction is closed, the Partnership will pay all of its indebtedness, and
then the Partnership will distribute the net sale proceeds pursuant to the
terms of the Partnership Agreement. The estimated uses of the sale proceeds
are as follows:
Contract Sales Price of the Roseville System..................... $30,900,000
Add: Cash on Hand............................................... 164,357
Estimated Net Closing Adjustments.......................... 465,147
Less: Repayment of Debt.......................................... (9,850,000)
Brokerage Fees............................................. (772,500)
Portion of Sale Proceeds Held in Escrow.................... (1,550,000)
-----------
Cash Available for Distribution by the Partnership......... $19,357,004
===========
Taking into account the distributions to be made on the sale of the
Roseville System, the estimated after-tax internal rate of return on an
investment in the Partnership is approximately 1.31 percent.
Based on financial information available at September 30, 1996, the
following table presents the estimated results of the Partnership when it has
completed the sale of the Roseville System:
Dollar Amount Raised............................................ $41,044,500
Number of Cable Television Systems Purchased.................... Two
Date of Closing of Offering..................................... January 1989
Tax and Distribution Data per $1,000 of Limited Partnership
Capital:
Federal Income Tax Results
Ordinary Income (Loss)
--from operations............................................. $ (827)
--from recapture.............................................. $1,182
Capital Gain (Loss)........................................... $ (116)
Cash Distributions to Investors
Source (on GAAP basis)
--investment income........................................... $ 203
--return of capital........................................... $1,000
Source (on cash basis)
--sales....................................................... $1,203
9
UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF IDS/JONES GROWTH PARTNERS 87-A, LTD.
The following unaudited pro forma balance sheet assumes that as of September
30, 1996, the Partnership had sold the Roseville System for $30,900,000. The
funds available to the Partnership, adjusting for the estimated net closing
adjustments of the Roseville System, are expected to total approximately
$31,365,147. Such funds will be used to repay all indebtedness of the
Partnership and brokerage fees, and the balance will be distributed pursuant
to the terms of the Partnership Agreement. Because the limited partners will
not receive distributions totaling 125 percent of the amount initially
contributed to the Partnership by the limited partners, the General Partners
will not receive any of the net sale proceeds.
The unaudited pro forma balance sheet should be read in conjunction with the
appropriate notes to the unaudited pro forma balance sheet.
ALL OF THE FOLLOWING UNAUDITED PRO FORMA FINANCIAL INFORMATION IS BASED UPON
AMOUNTS AS OF SEPTEMBER 30, 1996 AND CERTAIN ESTIMATES OF LIABILITIES AT
CLOSING. FINAL RESULTS MAY DIFFER FROM SUCH INFORMATION.
10
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ------------ -----------
ASSETS
Cash and Cash Equivalents............... $ 164,357 $ 20,742,647 $20,907,004
Trade Receivables, net.................. 277,727 (277,727) --
Investment in Cable Television
Properties:
Property, plant and equipment, net.... 8,986,986 (8,986,986) --
Franchise costs and other intangibles,
net.................................. 2,676,178 (2,676,178) --
----------- ------------ -----------
Total investment in cable television
properties......................... 11,663,164 (11,663,164) --
Deposits, Prepaid Expenses and Deferred
Charges................................ 320,565 (320,565) --
----------- ------------ -----------
Total Assets............................ $12,425,813 $ 8,481,191 $20,907,004
=========== ============ ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Debt.................................. $ 9,850,000 $ (9,850,000) $ --
Trade accounts payable and accrued
liabilities.......................... 103,758 (103,758) --
Subscriber prepayments................ 29,387 (29,387) --
Accrued distribution to limited
partners............................. -- 20,907,004 20,907,004
----------- ------------ -----------
Total Liabilities................... 9,983,145 10,923,859 20,907,004
----------- ------------ -----------
Partners' Capital:
Managing General Partner.............. (1,770) 1,770 --
Supervising General Partner........... (1,769) 1,769 --
Limited Partners...................... 2,446,207 (2,446,207) --
----------- ------------ -----------
Total Partners' Capital............. 2,442,668 (2,442,668) --
----------- ------------ -----------
Total Liabilities and Partners'
Capital.............................. $12,425,813 $ 8,481,191 $20,907,004
=========== ============ ===========
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited balance sheet.
11
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ------------ ---------
REVENUES.................................. $14,465,490 $(14,465,490) $--
COSTS AND EXPENSES:
Operating expenses...................... 7,972,171 (7,972,171) --
Management fees and allocated overhead
from the Managing General Partner...... 1,848,033 (1,848,033) --
Depreciation and Amortization........... 4,469,809 (4,469,809) --
----------- ------------ ----
OPERATING INCOME.......................... 175,477 (175,477) --
----------- ------------ ----
OTHER INCOME (EXPENSE):
Interest expense........................ (1,732,547) 1,732,547 --
Other, net.............................. 4,007 (4,007) --
----------- ------------ ----
Total other income (expense), net..... (1,728,540) 1,728,540 --
----------- ------------ ----
NET INCOME (LOSS)......................... $(1,553,063) $ 1,553,063 $--
=========== ============ ====
NET INCOME (LOSS) PER LIMITED PARTNERSHIP
INTEREST................................. $ (9.37) $ 9.37 $--
=========== ============ ====
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited statement.
12
IDS/JONES GROWTH PARTNERS 87-A, LTD.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
----------- ------------ ---------
REVENUES.................................. $ 6,649,872 $ (6,649,872) $--
COSTS AND EXPENSES:
Operating expenses...................... 4,133,452 (4,133,452) --
Management fees and allocated overhead
from the Managing General Partner...... 815,814 (815,814) --
Depreciation and amortization........... 1,466,414 (1,466,414) --
----------- ------------ ----
OPERATING INCOME.......................... 234,192 (234,192) --
----------- ------------ ----
OTHER INCOME (EXPENSE):
Interest expense........................ (585,258) 585,258 --
Gain on sale of cable television system. 21,096,325 (21,096,325) --
Other, net.............................. (2,818) 2,818 --
----------- ------------ ----
Total other income (expense), net..... 20,508,249 (20,508,249) --
----------- ------------ ----
NET INCOME (LOSS)......................... $20,742,441 $(20,742,441) $--
=========== ============ ====
NET INCOME (LOSS) PER LIMITED PARTNERSHIP
INTEREST................................. $ 124.87 $ (124.87) $--
=========== ============ ====
The accompanying notes to unaudited pro forma financial statements are an
integral part of this unaudited statement.
13
IDS/JONES GROWTH PARTNERS 87-A, LTD.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1) The following calculations present the sale of the Roseville System and
the resulting estimated proceeds expected to be received by the Partnership.
2) The unaudited pro forma balance sheet assumes that the Partnership had
sold the Roseville System for $30,900,000 as of September 30, 1996. The
unaudited statements of operations assume that the Partnership had sold the
Roseville System for $30,900,000 as of January 1, 1995.
3) The estimated gain recognized from the sale of the Roseville System and
corresponding estimated distribution to limited partners as of September 30,
1996 has been computed as follows:
GAIN ON SALE OF ASSETS:
Contract sales price............................................. $ 30,900,000
Less: Net book value of investment in cable television properties
at September 30, 1996...................................... (11,663,164)
------------
Gain on sale of assets........................................... $ 19,236,836
============
DISTRIBUTION TO PARTNERS:
Contract sales price............................................. $ 30,900,000
Working Capital Adjustment:
Add: Trade receivables, net..................................... 277,727
Prepaid expenses........................................... 320,565
Less: Accrued liabilities........................................ (103,758)
Subscriber prepayments..................................... (29,387)
------------
Adjusted cash received........................................... 31,365,147
Less: Outstanding debt to third parties.......................... (9,850,000)
Brokerage fee to The Jones Group, Ltd...................... (386,250)
Brokerage fee to IDS Management Corporation................ (386,250)
Add: Cash on hand............................................... 164,357
------------
Cash available from sale proceeds................................ $ 20,907,004
------------
Portion of sale proceeds held in escrow.......................... (1,550,000)
------------
Cash available for distribution in 1997.......................... $ 19,357,004
============
14
AVAILABLE INFORMATION
The Partnership's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 is being mailed to the limited partners of the Partnership
together with this Proxy Statement.
INCORPORATION BY REFERENCE
The Partnership's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 is incorporated by reference in this proxy statement. The
Partnership specifically incorporates by reference herein Item 1. Business,
Item 2. Properties, Item 5. Market for the Registrant's Common Stock and
Related Security Holder Matters, Item 6. Selected Financial Data, Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, Item 8. Financial Statements and Item 13. Certain Relationships
and Related Transactions from its 1996 Annual Report on Form 10-K.
15
LOGO
[JONES INTERCABLE
LOGO APPEARS HERE]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE PARTNERSHIP BY THE MANAGING GENERAL
PARTNER
The undersigned Limited Partner of IDS/Jones Growth Partners 87-A, Ltd., a
Colorado limited partnership, hereby votes on the sale of IDS/Jones Growth
Partners 87-A, Ltd.'s Roseville, California cable television system pursuant to
the terms and conditions of that certain Asset Purchase Agreement dated as of
October 14, 1996, as amended, as follows:
[_] CONSENTS [_] WITHHOLDS CONSENT [_] ABSTAINS
(continued on other side)
- - ---------------------------------------
- - ---------------------------------------
LOGO
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED LIMITED PARTNER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSED SALE TRANSACTION.
PLEASE SIGN EXACTLY AS NAME
APPEARS.
DATED: _____________________, 1997
__________________________________
Beneficial Owner Signature
(Investor)
__________________________________
Authorized Trustee/Custodian
Signature
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
LOGO
[JONES INTERCABLE
LOGO APPEARS HERE]
9697 EAST MINERAL AVENUE
ENGLEWOOD, COLORADO 80112
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE PARTNERSHIP BY THE MANAGING GENERAL
PARTNER
The undersigned Limited Partner of IDS/Jones Growth Partners 87-A, Ltd., a
Colorado limited partnership, hereby votes on the sale of IDS/Jones Growth
Partners 87-A, Ltd.'s Roseville, California cable television system pursuant to
the terms and conditions of that certain Asset Purchase Agreement dated as of
October 14, 1996, as amended, as follows:
[_] CONSENTS [_] WITHHOLDS CONSENT [_] ABSTAINS
(continued on other side)
- - ---------------------------------------
- - ---------------------------------------
LOGO
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED LIMITED PARTNER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSED SALE TRANSACTION.
PLEASE SIGN EXACTLY AS NAME
APPEARS.
When limited partnership inter-
ests are held by more than one
person, all owners should sign.
When signing as attorney, as ex-
ecutor, administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporation name by
authorized officer. If a partner-
ship, please sign in partnership
name by authorized person.
DATED: _____________________, 1997
__________________________________
Signature
__________________________________
Signature
__________________________________
Signature
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.