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 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission file number: 0-17734
IDS/JONES GROWTH PARTNERS 89-B, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-1060546
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State of Organization (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(Address of principal executive office and Zip Code (Registrant's telephone
no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited
Partnership
Interests
Indicate by check mark whether the 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
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State the aggregate market value of the voting stock held by non-affiliates of
the registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
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DOCUMENTS INCORPORATED BY REFERENCE: None
(27868)
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 the
Partnership, the Venture or the Managing General Partner expects, believes or
anticipates will or may occur in the future are forward-looking statements.
These forward-looking statements are based upon certain assumptions and are
subject to a number of risks and uncertainties. Actual results could differ
materially from the results predicted by these forward-looking statements.
PART I.
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ITEM 1. BUSINESS
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THE PARTNERSHIP. IDS/Jones Growth Partners 89-B, Ltd. (the "Partnership")
is a Colorado limited partnership that was formed to acquire, own and operate
cable television systems in the United States. Jones Cable Corporation, a
Colorado corporation, is the managing general partner (the "Managing General
Partner") and IDS Cable Corporation, a Minnesota corporation, is the supervising
general partner (the "Supervising General Partner") of the Partnership. The
Managing General Partner is a wholly owned subsidiary of Jones Intercable, Inc.
("Intercable"), which is also a Colorado corporation and one of the largest
cable television system operators in the nation. The Supervising General
Partner is a wholly owned subsidiary of IDS Management Corporation, a Minnesota
corporation, which in turn is a wholly owned subsidiary of American Express
Financial Corporation, a Delaware corporation.
The Partnership and IDS/Jones Growth Partners II, L.P., an affiliated
Colorado limited partnership ("Growth Partners II"), formed a Colorado general
partnership known as IDS/Jones Joint Venture Partners (the "Venture") for the
purpose of acquiring cable television systems. IDS Cable II Corporation, a
wholly owned subsidiary of IDS Management Corporation, which is a wholly owned
subsidiary of American Express Financial Corporation, acts as supervising
general partner of Growth Partners II. IDS Management Corporation and
Intercable each have an approximate 5 percent equity interest in the Venture,
Growth Partners II has a 66 percent interest in the Venture, and the Partnership
has a 24 percent interest in the Venture.
The Partnership does not directly own any cable television system. The
Venture owns the cable television systems serving the communities of Aurora,
North Aurora, Montgomery, Plano, Oswego, Sandwich, Yorkville and certain
unincorporated areas of Kendall and Kane Counties, all in the State of Illinois
(the "Aurora System"). See Item 2.
It is Intercable's publicly announced policy that it intends to liquidate
its managed limited partnerships, including the Partnership, as opportunities
for sales of partnership cable television systems arise in the marketplace over
the next several years. In accordance with Intercable's policy, the Aurora
System, along with other Chicago-area systems owned or managed by Intercable and
its affiliates, were marketed for sale in 1996. The deadline set by Intercable
for receipt of indications of interest for such systems from prospective buyers
was October 15, 1996. Intercable did not receive any offer for the Aurora
System. Intercable will continue to explore other alternatives for sale. There
is no assurance as to the timing or terms of any sales.
CABLE TELEVISION SERVICES. The Aurora System offers to its subscribers
various types of programming, which include basic service, tier service, premium
service, pay-per-view programs and packages including several of these services
at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
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The Aurora System offers tier services on an optional basis to its
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The Aurora
System also offers a package that includes the basic service channels and the
tier services.
The Aurora System also offers premium services to its subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
The Aurora System also offers to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service on
a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Aurora System. At December 31,
1996, the Aurora System's monthly basic service rates ranged from $10.54 to
$11.17, monthly basic and tier ("basic plus") service rates ranged from $23.44
to $23.99, and monthly premium services ranged from $4.95 to $12.95 per premium
service. In addition, the Aurora System's pay-per-view programs and advertising
fees generate revenues. Related charges may include a nonrecurring installation
fee that ranges from $1.99 to $42.45; however, from time to time the Aurora
System has followed the common industry practice of reducing or waiving the
installation fee during promotional periods. Commercial subscribers such as
hotels, motels and hospitals are charged a nonrecurring connection fee that
usually covers the cost of installation. Except under the terms of certain
contracts with commercial subscribers and residential apartment and condominium
complexes, the subscribers are free to discontinue the service at any time
without penalty. For the year ended December 31, 1996 of the total fees
received by the Aurora System, basic service and tier service fees accounted for
approximately 68% of total revenues, premium service fees accounted for
approximately 14% of total revenues, pay-per-view fees were approximately 3% of
total revenues, advertising fees were approximately 6% of total revenues and the
remaining 9% of total revenues came principally from equipment rentals,
installation fees and program guide sales. The Aurora System is dependent upon
the timely receipt of service fees to provide for maintenance and replacement of
plant and equipment, current operating expenses and other costs.
FRANCHISES. The Aurora System is constructed and operated under non-
exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. These franchises typically contain many conditions, such as time
limitations on commencement and completion of construction, conditions of
service, including the number of channels, types of programming and the
provision of free service to schools and certain other public institutions, and
the maintenance of insurance and indemnity bonds. The provisions of local
franchises are subject to federal regulation.
The Venture holds 9 franchises for the Aurora System. These franchises
provide for the payment of fees to the issuing authorities and generally range
from 3% to 5% of the gross revenues of a cable television system. The 1984
Cable Act prohibits franchising authorities from imposing annual franchise fees
in excess of 5% of gross revenues and also permits the cable television system
operator to seek renegotiation and modification of franchise requirements if
warranted by changed circumstances.
The Venture has never had a franchise revoked. The Venture is currently
negotiating the renewal of one franchise that will expire prior to December 31,
1997. The Managing General Partner has no reason to believe
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that such franchise will not be renewed in due course. Intercable recently has
experienced lengthy negotiations with some franchising authorities for the
granting of franchise renewals. Some of the issues involved in recent renewal
negotiations include rate regulation, customer service standards, cable plant
upgrade or replacement and shorter terms of franchise agreements.
COMPETITION. Cable television systems currently experience competition
from several sources.
Broadcast Television. Cable television systems have traditionally competed
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with broadcast television, which consists of television signals that the viewer
is able to receive directly on his television without charge using an "off-air"
antenna. The extent of such competition is dependent in part upon the quality
and quantity of signals available by such antenna reception as compared to the
services provided by the local cable system. Accordingly, it has generally been
less difficult for cable operators to obtain higher penetration rates in rural
areas where signals available off-air are limited, than in metropolitan areas
where numerous, high quality off-air signals are often available without the aid
of cable television systems.
Traditional Overbuild. Cable television franchises are not exclusive, so
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that more than one cable television system may be built in the same area (known
as an "overbuild"), with potential loss of revenues to the operator of the
original cable television system. Intercable has experienced overbuilds in
connection with certain systems that it has owned or managed for limited
partnerships, and currently there are overbuilds in the systems owned or managed
by Intercable. Constructing and developing a cable television system is a
capital intensive process, and it is often difficult for a new cable system
operator to create a marketing edge over the existing system. Generally, an
overbuilder would be required to obtain franchises from the local governmental
authorities, although in some instances, the overbuilder could be the local
government itself. In any case, an overbuilder would be required to obtain
programming contracts from entertainment programmers and, in most cases, would
have to build a complete cable system, including headends, trunk lines and drops
to individual subscribers homes, throughout the franchise areas.
DBS. High-powered direct-to-home satellites have made possible the wide-
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scale delivery of programming to individuals throughout the United States using
small roof-top or wall-mounted antennas. Several companies began offering
direct broadcast satellite ("DBS") service over the last few years and
additional entrants are expected. Companies offering DBS service use video
compression technology to increase channel capacity of their systems to 100 or
more channels and to provide packages of movies, satellite network and other
program services which are competitive to those of cable television systems.
DBS cannot currently offer its subscribers local programming, although at least
one future DBS entrant is attempting to offer customers regional delivery of
local broadcast signals. In addition to emerging high-powered DBS competition,
cable television systems face competition from a major medium-powered satellite
distribution provider and several low-powered providers, whose service requires
use of much larger home satellite dishes. Not all subscribers terminate cable
television service upon acquiring a DBS system. The Managing General Partner
has observed that there are DBS subscribers that also elect to subscribe to
cable television service in order to obtain the greatest variety of programming
on multiple television sets, including local programming not available through
DBS service. The ability of DBS service providers to compete successfully with
the cable television industry will depend on, among other factors, the ability
of DBS providers to overcome certain legal and technical hurdles and the
availability of equipment at reasonable prices.
Telephone. Federal cross-ownership restrictions historically limited entry
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by local telephone companies into the cable television business. The 1996
Telecommunications Act (the "1996 Telecom Act") eliminated this cross-ownership
restriction, making it possible for companies with considerable resources to
overbuild existing cable operators and enter the business. Several telephone
companies have begun seeking cable television franchises from local governmental
authorities and constructing cable television systems. Ameritech, one of the
seven regional Bell Operating Companies ("BOCs"), which provides telephone
service in a multi-state region including Illinois, has been the most active BOC
in seeking local cable franchises within its service area. It has already begun
cable service in Naperville, Illinois and has also obtained franchises for Glen
Ellyn and Vernon Hills, Illinois, all of which are currently served by cable
systems owned by three partnerships managed by
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Intercable. The Managing General Partner cannot predict at this time the extent
of telephone company competition that will emerge to owned or managed cable
television systems. The entry of telephone companies as direct competitors,
however, is likely to continue over the next several years and could adversely
affect the profitability and market value of Intercable's owned and managed
systems. The entry of electric utility companies into the cable television
business, as now authorized by the 1996 Telecom Act, could have a similar
adverse effect.
Private Cable. Additional competition is provided by private cable
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television systems, known as Satellite Master Antenna Television (SMATV),
serving multi-unit dwellings such as condominiums, apartment complexes, and
private residential communities. These private cable systems may enter into
exclusive agreements with apartment owners and homeowners associations, which
may preclude operators of franchised systems from serving residents of such
private complexes. Private cable systems that do not cross public rights of way
are free from the federal, state and local regulatory requirements imposed on
franchised cable television operators. In some cases, the Venture has been
unable to provide cable television service to buildings in which private
operators have secured exclusive contracts to provide video and telephony
services. The Venture is interested in providing these same services, but
expects that the market to install and provide these services in multi-unit
buildings will continue to be highly competitive.
MMDS. Cable television systems also compete with wireless program
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distribution services such as multichannel, multipoint distribution service
("MMDS") systems, commonly called wireless cable, which are licensed to serve
specific areas. MMDS uses low-power microwave frequencies to transmit
television programming over-the-air to paying subscribers. The MMDS industry is
less capital intensive than the cable television industry, and it is therefore
more practical to construct MMDS systems in areas of lower subscriber
penetration. Wireless cable systems are now in direct competition with cable
television systems in several areas of the country, including the system in Pima
County, Arizona owned by Intercable. Telephone companies have recently acquired
or invested in wireless companies, and may use MMDS systems to provide services
within their service areas in lieu of wired delivery systems. Enthusiasm for
MMDS has waned in recent months, however, as Bell Atlantic and NYNEX have
suspended their investment in two major MMDS companies. To date, the Venture
has not lost a significant number of subscribers, nor a significant amount of
revenue, to MMDS operators competing with the Venture's cable television
systems. A series of actions taken by the FCC, however, including reallocating
certain frequencies to the wireless services, are intended to facilitate the
development of wireless cable television systems as an alternative means of
distributing video programming. The FCC recently held auctions for spectrum
that will be used by wireless operators to provide additional channels of
programming over larger distances. In addition, an emerging technology, Local
Multipoint Distribution services ("LMDS"), could also pose a significant threat
to the cable television industry, if and when it becomes established. LMDS,
sometimes referred to as cellular television, could have the capability of
delivering more than 100 channels of video programming to a subscriber's home.
The potential impact, however, of LMDS is difficult to assess due to the newness
of the technology and the absence of any current fully operational LMDS systems.
Cable television systems are also in competition, in various degrees with
other communications and entertainment media, including motion pictures and home
video cassette recorders.
REGULATION AND LEGISLATION
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The operation of cable television systems is extensively regulated by the
FCC, some state governments and most local governments. The new 1996 Telecom
Act alters the regulatory structure governing the nation's telecommunications
providers. It removes barriers to competition in both the cable television
market and the local telephone market. Among other things, it also reduces the
scope of cable rate regulation.
The 1996 Telecom Act requires the FCC to undertake a host of implementing
rulemakings, the final outcome of which cannot yet be determined. Moreover,
Congress and the FCC have frequently revisited the
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subject of cable regulation. Future legislative and regulatory changes could
adversely affect the Venture's operations. This section briefly summarizes key
laws and regulations affecting the operation of the Venture's cable systems and
does not purport to describe all present, proposed, or possible laws and
regulations affecting the Venture.
Cable Rate Regulation. The 1992 Cable Act imposed an extensive rate
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regulation regime on the cable television industry. Under that regime, all
cable systems are subject to rate regulation, unless they face "effective
competition" in their local franchise area. Federal law now defines "effective
competition" on a community-specific basis as requiring either low penetration
(less than 30%) by the incumbent cable operator, appreciable penetration (more
than 15%) by competing multichannel video providers ("MVPs"), or the presence of
a competing MVP affiliated with a local telephone company.
Although the FCC rules control, local government units (commonly referred
to as local franchising authorities or "LFAs") are primarily responsible for
administering the regulation of the lowest level of cable -- the basic service
tier ("BST"), which typically contains local broadcast stations and public,
educational, and government ("PEG") access channels. Before an LFA begins BST
rate regulation, it must certify to the FCC that it will follow applicable
federal rules, and many LFAs have voluntarily declined to exercise this
authority. LFAs also have primary responsibility for regulating cable equipment
rates. Under federal law, charges for various types of cable equipment must be
unbundled from each other and from monthly charges for programming services.
The 1996 Telecom Act allows operators to aggregate costs for broad categories of
equipment across geographic and functional lines. This change should facilitate
the introduction of new technology.
The FCC itself directly administers rate regulation of any cable
programming service tiers ("CPST"), which typically contain satellite-delivered
programming. Under the 1996 Telecom Act, the FCC can regulate CPST rates only
if an LFA first receives at least two rate complaints from local subscribers and
then files a formal complaint with the FCC. When new CPST rate complaints are
filed, the FCC now considers only whether the incremental increase is justified
and will not reduce the previously established CPST rate.
Under the FCC's rate regulations, most cable systems were required to
reduce their BST and CPST rates in 1993 and 1994, and have since had their rate
increases governed by a complicated price cap scheme that allows for the
recovery of inflation and certain increased costs, as well as providing some
incentive for expanding channel carriage. The FCC has modified its rate
adjustment regulations to allow for annual rate increases and to minimize
previous problems associated with regulatory lag. Operators also have the
opportunity of bypassing this "benchmark" regulatory scheme in favor of
traditional "cost-of-service" regulation in cases where the latter methodology
appears favorable. Premium cable services offered on a per-channel or per-
program basis remain unregulated, as do affirmatively marketed packages
consisting entirely of new programming product. Federal law requires that the
BST be offered to all cable subscribers, but limits the ability of operators to
require purchase of any CPST before purchasing premium services offered on a
per-channel or per-program basis.
The 1996 Telecom Act sunsets FCC regulation of CPST rates for all systems
(regardless of size) on March 31, 1999. It also relaxes existing uniform rate
requirements by specifying that uniform rate requirements do not apply where the
operator faces "effective competition," and by exempting bulk discounts to
multiple dwelling units, although complaints about predatory pricing still may
be made to the FCC.
Cable Entry Into Telecommunications. The 1996 Telecom Act provides that no
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state or local laws or regulations may prohibit or have the effect of
prohibiting any entity from providing any interstate or intrastate
telecommunications service. States are authorized, however, to impose
"competitively neutral" requirements regarding universal service, public safety
and welfare, service quality, and consumer protection. State and local
governments also retain their authority to manage the public rights-of-way and
may require reasonable, competitively neutral compensation for management of the
public rights-of-way when cable operators provide telecommunications service.
The favorable pole attachment rates afforded cable operators under federal law
can be gradually increased by utility companies owning the poles (beginning in
2001) if the operator provides telecommunications service, as well as cable
service, over its plant.
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Cable entry into telecommunications will be affected by the regulatory
landscape now being fashioned by the FCC and state regulators. One critical
component of the 1996 Telecom Act to facilitate the entry of new
telecommunications providers (including cable operators) is the interconnection
obligation imposed on all telecommunications carriers. Review of the FCC's
initial interconnection order is now pending before the Eighth Circuit Court of
Appeals.
Telephone Company Entry Into Cable Television. The 1996 Telecom Act allows
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telephone companies to compete directly with cable operators by repealing the
historic telephone company/cable cross-ownership ban. Local exchange carriers
("LECs"), including the BOCs, can now compete with cable operators both inside
and outside their telephone service areas. Because of their resources, LECs
could be formidable competitors to traditional cable operators, and certain LECs
have begun offering cable service. As described above, Intercable is now
witnessing the beginning of LEC competition in a few of its cable communities.
Under the 1996 Telecom Act, a LEC providing video programming to
subscribers will be regulated as a traditional cable operator (subject to local
franchising and federal regulatory requirements), unless the LEC elects to
provide its programming via an "open video system" ("OVS"). To qualify for OVS
status, the LEC must reserve two-thirds of the system's activated channels for
unaffiliated entities.
Although LECs and cable operators can now expand their offerings across
traditional service boundaries, the general prohibition remains on LEC buyouts
(i.e., any ownership interest exceeding 10 percent) of co-located cable systems,
cable operator buyouts of co-located LEC systems, and joint ventures between
cable operators and LECs in the same market. The 1996 Telecom Act provides a
few limited exceptions to this buyout prohibition, including a carefully
circumscribed "rural exemption." The 1996 Telecom Act also provides the FCC
with the limited authority to grant waivers of the buyout prohibition (subject
to LFA approval).
Electric Utility Entry Into Telecommunications/Cable Television. The 1996
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Telecom Act provides that registered utility holding companies and subsidiaries
may provide telecommunications services (including cable television)
notwithstanding the Public Utilities Holding Company Act. Electric utilities
must establish separate subsidiaries, known as "exempt telecommunications
companies" and must apply to the FCC for operating authority. Again, because of
their resources, electric utilities could be formidable competitors to
traditional cable systems.
Additional Ownership Restrictions. The 1996 Telecom Act eliminates
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statutory restrictions on broadcast/cable cross-ownership (including broadcast
network/cable restrictions), but leaves in place existing FCC regulations
prohibiting local cross-ownership between co-located television stations and
cable systems. The 1996 Telecom Act also eliminates the three year holding
period required under the 1992 Cable Act's "anti-trafficking" provision. The
1996 Telecom Act leaves in place existing restrictions on cable cross-ownership
with SMATV and MMDS facilities, but lifts those restrictions where the cable
operator is subject to effective competition. In January 1995, however, the FCC
adopted regulations which permit cable operators to own and operate SMATV
systems within their franchise area, provided that such operation is consistent
with local cable franchise requirements.
Pursuant to the 1992 Cable Act, the FCC adopted rules precluding a cable
system from devoting more than 40% of its activated channel capacity to the
carriage of affiliated national program services. A companion rule establishing
a nationwide ownership cap on any cable operator equal to 30% of all domestic
cable subscribers has been stayed pending further judicial review.
There are no federal restrictions on non-U.S. entities having an ownership
interest in cable television systems or the FCC licenses commonly employed by
such systems. Section 310(b)(4) of the Communications Act does, however,
prohibit foreign ownership of FCC broadcast and telephone licenses, unless the
FCC concludes that such foreign ownership is consistent with the public
interest. BCI's investment in Intercable could, therefore,
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adversely affect any plan to acquire FCC broadcast or common carrier licenses.
The Partnership, however, does not currently plan to acquire such licenses.
Must Carry/Retransmission Consent. The 1992 Cable Act contains broadcast
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signal carriage requirements that allow local commercial television broadcast
stations to elect once every three years between requiring a cable system to
carry the station ("must carry") or negotiating for payments for granting
permission to the cable operator to carry the station ("retransmission
consent"). Less popular stations typically elect "must carry," and more popular
stations typically elect "retransmission consent." Must carry requests can
dilute the appeal of a cable system's programming offerings, and retransmission
consent demands may require substantial payments or other concessions. Either
option has a potentially adverse affect on the Venture's business.
Additionally, cable systems are required to obtain retransmission consent for
all "distant" commercial television stations (except for satellite-delivered
independent "superstations" such as WTBS). The constitutionality of the must
carry requirements has been challenged and is awaiting a decision from the U.S.
Supreme Court.
Access Channels. LFAs can include franchise provisions requiring cable
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operators to set aside certain channels for public, educational and governmental
access programming. Federal law also requires cable systems to designate a
portion of their channel capacity (up to 15% in some cases) for commercial
leased access by unaffiliated third parties. The FCC has adopted rules
regulating the terms, conditions and maximum rates a cable operator may charge
for use of the designated channel capacity, but use of commercial leased access
channels has been relatively limited. The FCC released revised rules in
February 1997 which mandate a modest rate reduction and could make commercial
leased access a more attractive option to third party programmers.
Access to Programming. To spur the development of independent cable
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programmers and competition to incumbent cable operators, the 1992 Cable Act
imposed restrictions on the dealings between cable operators and cable
programmers. Of special significance from a competitive business posture, the
1992 Cable Act precludes video programmers affiliated with cable companies from
favoring cable operators over competitors and requires such programmers to sell
their programming to other multichannel video distributors. This provision
limits the ability of vertically integrated cable programmers to offer exclusive
programming arrangements to cable companies.
Other FCC Regulations. In addition to the FCC regulations noted above,
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there are other FCC regulations covering such areas as equal employment
opportunity, subscriber privacy, programming practices (including, among other
things, syndicated program exclusivity, network program nonduplication, local
sports blackouts, indecent programming, lottery programming, political
programming, sponsorship identification, and children's programming
advertisements), registration of cable systems and facilities licensing,
maintenance of various records and public inspection files, frequency usage,
lockbox availability, antenna structure notification, tower marking and
lighting, consumer protection and customer service standards, technical
standards, and consumer electronics equipment compatibility. The FCC is
expected to impose new Emergency Alert System requirements on cable operators
this year. The FCC has the authority to enforce its regulations through the
imposition of substantial fines, the issuance of cease and desist orders and/or
the imposition of other administrative sanctions, such as the revocation of FCC
licenses needed to operate certain transmission facilities used in connection
with cable operations.
Two pending FCC proceedings of particular competitive concern involve
inside wiring and navigational devices. The former rulemaking is considering
ownership of cable wiring located inside multiple dwelling unit complexes. If
the FCC concludes that such wiring belongs to, or can be unilaterally acquired
by the complex owner, it will become easier for complex owners to terminate
service from the incumbent cable operator in favor of a new entrant. The latter
rulemaking is considering whether cable customers must be allowed to purchase
cable converters from third party vendors. If the FCC concludes that such
distribution is required, and does not make appropriate allowances for signal
piracy concerns, it may become more difficult for cable operators to combat
theft of service.
Copyright. Cable television systems are subject to federal copyright
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licensing covering carriage of television and radio broadcast signals. In
exchange for filing certain reports and contributing a percentage of their
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revenues to a federal copyright royalty pool (that varies depending on the size
of the system and the number of distant broadcast television signals carried),
cable operators can obtain blanket permission to retransmit copyrighted material
on broadcast signals. The possible modification or elimination of this
compulsory copyright license is the subject of continuing legislative review and
could adversely affect the Venture's ability to obtain desired broadcast
programming. In addition, the cable industry pays music licensing fees to BMI
and is negotiating a similar arrangement with ASCAP. Copyright clearances for
nonbroadcast programming services are arranged through private negotiations.
State and Local Regulation. Cable television systems generally are
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operated pursuant to nonexclusive franchises granted by a municipality or other
state or local government entity in order to cross public rights-of-way.
Federal law now prohibits franchise authorities from granting exclusive
franchises or from unreasonably refusing to award additional franchises. Cable
franchises generally are granted for fixed terms and in many cases include
monetary penalties for non-compliance and may be terminable if the franchisee
fails to comply with material provisions.
The terms and conditions of franchises vary materially from jurisdiction to
jurisdiction. Each franchise generally contains provisions governing cable
operations, service rates, franchise fees, system construction and maintenance
obligations, system channel capacity, design and technical performance, customer
service standards, and indemnification protections. A number of states subject
cable television systems to the jurisdiction of centralized state governmental
agencies, some of which impose regulation of a character similar to that of a
public utility. Although LFAs have considerable discretion in establishing
franchise terms, there are certain federal limitations. For example, LFAs
cannot insist on franchise fees exceeding 5% of the system's gross revenues,
cannot dictate the particular technology used by the system, and cannot specify
video programming other than identifying broad categories of programming.
Federal law contains renewal procedures designed to protect incumbent
franchisees against arbitrary denials of renewal. Even if a franchise is
renewed, the franchise authority may seek to impose new and more onerous
requirements such as significant upgrades in facilities and services or
increased franchise fees as a condition of renewal. Similarly, if a franchise
authority's consent is required for the purchase or sale of a cable system or
franchise, such authority may attempt to impose more burdensome or onerous
franchise requirements in connection with a request for consent. Historically,
franchises have been renewed for cable operators that have provided satisfactory
services and have complied with the terms of their franchises.
GENERAL. The Venture's business consists of providing cable television
services to a large number of customers, the loss of any one of which would have
no material effect on the Venture's business. The Aurora System has had some
subscribers who later terminated the service. Terminations occur primarily
because people move to another home or to another city. In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service. The amount of past due accounts in the Aurora
System is not significant. The Venture's policy with regard to past due
accounts is basically one of disconnecting service before a past due account
becomes material.
The Venture does not depend to any material extent on the availability of
raw materials; it carries no significant amounts of inventory and it has no
material backlog of customer orders. Neither the Venture nor the Partnership
has any employees because all properties are managed by employees of the
Managing General Partner. Intercable has engaged in research and development
activities relating to the provision of new services but the amount of the
Venture's funds expended for such research and development has never been
material.
Compliance with federal, state and local provisions that have been enacted
or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Venture.
9
ITEM 2. PROPERTIES
-------------------
The Aurora System was acquired by the Venture in May 1990. The following
sets forth (i) the monthly basic plus service rates charged to subscribers, (ii)
the number of basic subscribers and pay units and (iii) the range of franchise
expiration dates for the Aurora System. The monthly basic service rates set
forth herein represent, with respect to systems with multiple headends, the
basic service rate charged to the majority of the subscribers within the system.
In cable television systems, basic subscribers can subscribe to more than one
pay TV service. Thus, the total number of pay services subscribed to by basic
subscribers are called pay units. As of December 31, 1996, the Aurora System
operated cable plant, passing approximately 74,529 homes, with an approximate
63% penetration rate. Figures for numbers of subscribers, miles of cable plant
and homes passed are compiled from the Managing General Partner's records and
may be subject to adjustments.
At December 31,
-------------------------
AURORA SYSTEM 1996 1995 1994
- ------------- ------- ------- -------
Monthly basic plus service rate $ 23.99 $ 22.58 $ 21.08
Basic subscribers 47,018 43,982 40,666
Pay units 26,002 25,938 27,856
ITEM 3. LEGAL PROCEEDINGS
--------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
None.
PART II.
--------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
-------------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------
While the Partnership is publicly held, there is no public market for the
limited partnership interests, and it is not expected that a market will develop
in the future. During 1996, several partners of the Partnership conducted
"limited tender offers" for interests in the Partnership at prices ranging from
$50 to $53 per interest. As of February 14, 1997, the number of equity security
holders in the Partnership was 2,886.
10
Item 6. Selected Financial Data
- -------------------------------
For the Year Ended December 31,
--------------------------------------------------------------------
IDS/Jones Growth Partners 89-B, Ltd. 1996 1995 1994 1993 1992
- --------------------------------------- ------------ ------------ ------------ ------------ ------------
Revenues $ - $ - $ - $ - $ -
Depreciation and Amortization - - - - -
Operating Income - - - - -
Net Loss (2,044,291) (2,237,773) (2,171,573) (2,011,841) (2,005,831)
Net Loss per Limited Partnership Unit (31.93) (34.95) (33.92) (31.42) (31.33)
Weighted Average Number of
Limited Partnership
Units Outstanding 63,383 63,383 63,383 63,383 63,383
General Partners' Deficit (173,697) (153,254) (130,876) (109,160) (89,042)
Limited Partners' Capital (Deficit) (3,322,721) (1,298,873) 916,522 3,066,379 5,160,495
Total Assets - - 888,039 3,059,612 5,071,453
Debt - - - - -
IDS/Jones Joint Venture Partners For the Year Ended December 31,
- --------------------------------------- -------------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
Revenues $18,394,451 $16,860,900 $15,388,489 $15,196,068 $14,486,583
Depreciation and Amortization 9,926,847 10,317,694 10,601,501 10,883,845 10,507,110
Operating Loss (4,493,064) (5,411,813) (5,888,186) (5,816,179) (5,481,821)
Net Loss (8,378,240) (9,171,199) (8,899,892) (8,245,251) (8,220,617)
Partners' Capital (Deficit) (5,548,162) 2,830,078 12,001,277 20,901,169 29,146,420
Total Assets 46,258,004 51,448,914 57,752,046 64,595,970 73,796,057
Debt 48,693,134 45,909,122 43,566,064 41,604,580 43,678,543
Jones Intercable, Inc. Advances 398,507 331,185 933,949 1,056,828 345,859
11
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
- -------------
The following discussion of the financial condition and results of
operations of IDS/Jones Growth Partners 89-B, Ltd. (the "Partnership" and
IDS/Jones Joint Venture Partners (the "Venture") contains, in addition to
historical information, forward-looking statements that are based upon certain
assumptions and are subject to a number of risks and uncertainties. The
Partnership's and Venture's actual results may differ significantly from the
results predicted in such forward-looking statements.
FINANCIAL CONDITION
- -------------------
IDS/Jones Growth Partners 89-B, Ltd. -
- ------------------------------------
The Partnership owns a 24 percent interest in the Venture. The
Partnership's investment in this cable television joint venture, accounted for
under the equity method, decreased by $2,044,291 compared to the December 31,
1995 balance. This decrease represents the Partnership's share of losses
generated by the Venture during 1996. These losses are anticipated to continue.
Refer to Management's Discussion and Analysis of Financial Condition and Results
of Operations for the Venture for details pertaining to its financial condition.
IDS/Jones Joint Venture Partners -
- --------------------------------
It is Intercable's publicly announced policy that it intends to liquidate
its managed limited partnerships, including the Partnership, as opportunities
for sales of partnership cable television systems arise in the marketplace over
the next several years. In accordance with Intercable's policy, the cable
television system serving the communities of Aurora, North Aurora, Montgomery,
Plano, Oswego, Sandwich, Yorkville and certain unincorporated areas of Kendall
and Kane Counties, all in the State of Illinois (the "Aurora System"), along
with other Chicago-area systems owned or managed by Intercable and its
affiliates, were marketed for sale in 1996. The deadline set by Intercable for
receipt of indications of interest for such systems from prospective buyers was
October 15, 1996. Intercable did not receive any offer for the Aurora System.
Intercable will continue to explore other alternatives for sale. There is no
assurance as to the timing or terms of any sales.
For the year ended December 31, 1996, the Venture generated net cash from
operating activities totaling $1,850,720, which is available to fund capital
expenditures and non-operating costs. During 1996, the Venture expended
approximately $4,602,000 on capital expenditures. Approximately 46 percent of
the expenditures related to plant extensions. Approximately 43 percent of the
expenditures related to construction of service drops to subscriber homes. The
remainder of the expenditures was used for various enhancements in the Aurora
System. Funding for these expenditures was provided by cash generated from
operations and borrowings under the Venture's credit facility. Budgeted capital
expenditures for 1997 are approximately $4,090,000. Approximately 38 percent of
the expenditures is for plant extensions. Approximately 36 percent of the
expenditures is for service drops. These capital expenditures are necessary to
maintain the value of the Aurora System. Funding for the expenditures is
expected to be provided by cash generated from operations and, if available,
borrowings from the Venture's credit facility.
On December 5, 1991, IDS Management Corporation made a $1,800,000 loan to
the Venture, which had been repaid at December 31, 1996. Also on December 5,
1991, Intercable made a $1,800,000 loan to the Venture of which $1,200,000 had
been repaid at December 31, 1996. Any amounts not repaid to Intercable are
convertible into equity in the Venture. In the first quarter of 1994, Intercable
agreed to subordinate to all other Venture debt its $1,406,647 advance to the
Venture outstanding at March 31, 1994 and IDS Management Corporation made an
additional loan of $1,000,000 to the Venture to fund principal repayments due at
the end of March 1994 on the Venture's then-outstanding term loan. The interest
rates on the respective loans, which will vary from time to time, with respect
to IDS Management Corporation's loans, are at its cost of borrowing, and, with
respect to Intercable's loans, are at its weighted average cost of borrowing. It
is anticipated that the remaining loans will be repaid over time with cash
generated from operations and borrowings from the Venture's revolving credit and
term loan. The related parties' notes will be repaid including accrued interest
in the following order: first, to Intercable the remaining $600,000 of the
$1,800,000 note dated December 5, 1991; second, to IDS Management Corporation
the $1,000,000 note dated March 30, 1994; and third, to Intercable the
$1,406,647 subordinated advance.
The Venture is a party to a revolving credit and term loan agreement with
two commercial banks. In the fourth quarter of 1996, Intercable amended the
credit facility to extend the revolving credit period and increase the
commitment to $47,000,000. The amended agreement allows for a reducing
revolving commitment that will begin to
12
reduce quarterly on June 30, 1999 until December 31, 1999, at which time the
commitment will reduce to zero and all principal and interest amounts will be
due and payable in full. At December 31, 1996, $45,600,000 was outstanding under
this agreement, leaving $1,400,000 available for future needs of the Venture,
subject to certain financial covenants that may limit borrowing. Interest on the
credit facility is at the Venture's option of the Prime Rate plus .625 percent,
the London Interbank Offered Rate plus 1.625 percent or the Certificate of
Deposit Rate plus 1.75 percent. The effective interest rates on outstanding
obligations to non-affiliates as of December 31, 1996 and 1995 were 7.38 percent
and 7.83 percent, respectively.
On December 5, 1991, Intercable made an equity investment in the Venture in
the amount of $2,872,000. Also on December 5, 1991, IDS Management Corporation
made an equity investment in the Venture of $2,872,000. As a result of their
equity contributions to the Venture, IDS Management Corporation and Intercable
each have a 5 percent equity interest in the Venture, the Partnership has a 24
percent interest and IDS/Jones Growth Partners II, L.P. has a 66 percent
interest. If the remaining portion of Intercable's December 5, 1991 loan is
converted to equity, the ownership percentages will be adjusted accordingly.
RESULTS OF OPERATIONS
- ---------------------
IDS/Jones Growth Partners 89-B, Ltd. -
- ------------------------------------
All of the operations of the Partnership are represented exclusively by its
24 percent interest in the Venture. Refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations for the Venture for
details pertaining to its operations.
IDS/Jones Joint Venture Partners -
- --------------------------------
Revenues of the Venture's Aurora System increased $1,533,551, or
approximately 9 percent, to $18,394,451 in 1996 compared to $16,860,900 in 1995.
The increase in revenues was primarily due to an increase in the number of basic
subscribers and basic service rate increases. An increase in the number of
basic service subscribers accounted for approximately 50 percent of the increase
in revenues. The number of basic service subscribers increased 3,036, or
approximately 7 percent, to 47,018 at December 31, 1996 compared to 43,982 at
December 31, 1995. Basic service rate increases accounted for approximately 45
percent of the increase in revenues. No other individual factor was significant
to the increases in revenues.
Operating expenses consist primarily of costs associated with the
operation and administration of the Aurora System. The principal cost
components are salaries paid to system personnel, programming expenses,
professional fees, subscriber billing costs, rent for leased facilities, cable
system maintenance expenses and marketing expenses.
Operating expenses increased $924,679, or approximately 9 percent, to
$10,733,857 in 1996 compared to $9,809,178 for the comparable 1995 period.
Operating expenses represented approximately 58 percent of revenues in 1996 and
1995, respectively. Increases in programming fees, due in part to the increase
in the subscriber base, primarily accounted for the increase in operating
expenses. No other individual factors contributed significantly to the
increase.
Management and supervision fees and allocated overhead from the General
Partners increased $80,970, or approximately 4 percent, to $2,226,811 in 1996
compared to $2,145,841 in 1995. The increase was due to the increase in
revenues, upon which management and supervision fees are based.
Depreciation and amortization expense decreased $390,847, or approximately
4 percent, to $9,926,847 in 1996 compared to $10,317,694 in 1995. The decrease
was due to the maturation of a portion of the tangible asset base.
Operating loss decreased $918,749, or approximately 17 percent, to
$4,493,064 in 1996 compared to $5,411,813 in 1995. The decrease was due to the
increase in revenues and the decrease in depreciation and amortization expense
exceeding the increase in operating expenses and management and supervision fees
and allocated overhead from the General Partners.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating income before depreciation
and amortization. This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard. Operating
13
income before depreciation and amortization expense increased $527,902, or
approximately 11 percent, to $5,433,783 in 1996 compared to $4,905,881 in 1995.
The increase was due to the increase in revenues exceeding the increases in
operating expenses and management and supervision fees and allocated overhead
from the General Partners.
Interest expense decreased $9,899, or less than one percent, to $3,757,477
in 1996 compared to $3,767,376 in 1995. This decrease was due to lower
effective interest rates on interest bearing obligations during 1996.
Consolidated loss decreased $792,959, or approximately 9 percent, to
$8,378,240 in 1996 compared to $9,171,199 in 1995. This decrease was due to the
factors discussed above. Such losses are expected to continue.
1995 Compared to 1994
---------------------
Revenues of the Venture increased $1,472,411, or approximately 10 percent,
to $16,860,900 in 1995 compared to $15,388,489 in 1994. An increase in the
number of basic subscribers accounted for approximately 57 percent of the
increase in revenues. The number of basic subscribers increased 3,316, or
approximately 8 percent, to 43,982 at December 31, 1995 compared to 40,666 at
December 31, 1994. Basic service rate increases accounted for approximately 40
percent of the increase in revenues. The increase in revenues was partially
offset by a decrease in premium service subscriptions. The number of premium
service subscriptions decreased 1,918, or approximately 7 percent, to 25,938 at
December 31, 1995 from 27,856 at December 31, 1994. No other individual factor
was significant to the increase in revenues.
Operating expenses increased $1,154,174, or approximately 13 percent, to
$9,809,178 in 1995 compared to $8,655,004 in 1994. Operating expenses
represented 58 percent of revenues in 1995 and 56 percent of revenues in 1994.
Increases in programming fees, personnel expenses and office related expenses
primarily accounted for the increase in operating expenses in 1995. No other
individual factor contributed significantly to the increase.
Management and supervision fees and allocated overhead from the General
Partners increased $125,671, or approximately 6 percent, to $2,145,841 in 1995
compared to $2,020,170 in 1994. The increase was primarily due to the increase
in revenues, upon which such management and supervision fees are based.
Depreciation and amortization expense decreased $283,807, or approximately
3 percent, to $10,317,694 in 1995 compared to $10,601,501 in 1994. The decrease
was due to the maturation of a portion of the tangible asset base.
Operating loss decreased $476,373, or approximately 8 percent, to
$5,411,813 in 1995 compared to $5,888,186 in 1994. The decrease was due to the
increase in revenues and the decrease in depreciation and amortization expense
exceeding the increases in operating expenses and management and supervision
fees and allocated overhead from the General Partners.
Operating income before depreciation and amortization increased $192,566,
or approximately 4 percent, to $4,905,881 in 1995 compared to $4,713,315 in
1994. The increase was due to the increase in revenues exceeding the increases
in operating expenses and management and supervision fees and allocated overhead
from the General Partners.
Interest expense increased $910,698, or approximately 32 percent, to
$3,767,376 in 1995 compared to $2,856,678 in 1994. The increase was due to
higher effective interest rates and higher outstanding balances on interest
bearing obligations.
Consolidated loss increased $271,307, or approximately 3 percent, to
$9,171,199 in 1995 compared to $8,899,892 in 1994. This increase was due to the
factors discussed above.
14
Item 8. Financial Statements
- -----------------------------
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1996 AND 1995
--------------------------------
INDEX
-----
Page
----------------
89-B Venture
---- -------
Report of Independent Public Accountants 16 24
Balance Sheets 17 25
Statements of Operations 18 27
Statements of Partners' Capital (Deficit) 19 28
Statements of Cash Flows 20 29
Notes to Financial Statements 21 30
15
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of IDS/Jones Growth Partners 89-B, Ltd.:
We have audited the accompanying balance sheets of IDS/JONES GROWTH
PARTNERS 89-B, LTD. (a Colorado limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Managing General
Partner's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS/Jones Growth
Partners 89-B, Ltd. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 7, 1997.
16
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
December 31,
---------------------------
1996 1995
------------ ------------
ASSETS $ - $ -
------ ============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
LIABILITIES:
Loss in excess of investment in cable television
joint venture $ 3,394,025 $ 1,349,734
Accounts payable - affiliate 102,393 102,393
------------ ------------
Total liabilities 3,496,418 1,452,127
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 500 500
Accumulated deficit (174,197) (153,754)
------------ ------------
(173,697) (153,254)
------------ ------------
Limited Partners-
Contributed capital (63,383 units
outstanding at December 31, 1996
and 1995) 12,623,901 12,623,901
Accumulated deficit (15,946,622) (13,922,774)
------------ ------------
(3,322,721) (1,298,873)
------------ ------------
Total liabilities and partners' capital (deficit) $ - $ -
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
17
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
Year Ended December 31,
---------------------------------------
1996 1995 1994
----------- ----------- -----------
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE $(2,044,291) $(2,237,773) $(2,171,573)
----------- ----------- -----------
NET LOSS $(2,044,291) $(2,237,773) $(2,171,573)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partners $ (20,443) $ (22,378) $ (21,716)
=========== =========== ===========
Limited Partners $(2,023,848) $(2,215,395) $(2,149,857)
=========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $(31.93) $(34.95) $ (33.92)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 63,383 63,383 63,383
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
18
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
Year Ended December 31,
---------------------------------------
1996 1995 1994
----------- ----------- -----------
GENERAL PARTNERS:
Jones Cable Corporation
Balance, beginning of year $ (76,627) $ (65,438) $ (54,580)
Net loss for year (10,222) (11,189) (10,858)
----------- ----------- -----------
Balance, end of year $ (86,849) $ (76,627) $ (65,438)
=========== =========== ===========
IDS Cable Corporation
Balance, beginning of year $ (76,627) $ (65,438) $ (54,580)
Net loss for year (10,221) (11,189) (10,858)
----------- ----------- -----------
Balance, end of year $ (86,848) $ (76,627) $ (65,438)
=========== =========== ===========
Total
Balance, beginning of year $ (153,254) $ (130,876) $ (109,160)
Net loss for year (20,443) (22,378) (21,716)
----------- ----------- -----------
Balance, end of year $ (173,697) $ (153,254) $ (130,876)
=========== =========== ===========
LIMITED PARTNERS:
Balance, beginning of year $(1,298,873) $ 916,522 $ 3,066,379
Net loss for year (2,023,848) (2,215,395) (2,149,857)
----------- ----------- -----------
Balance, end of year $(3,322,721) $(1,298,873) $ 916,522
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
19
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
Year Ended December 31,
---------------------------------------
1996 1995 1994
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,044,291) $(2,237,773) $(2,171,573)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Equity in net loss of
Cable Television Joint Venture 2,044,291 2,237,773 2,171,573
Increase in advances from affiliates - - -
----------- ----------- -----------
Net cash provided by operating activities - - -
----------- ----------- -----------
Net change in cash - - -
Cash, beginning of year - - -
----------- ----------- -----------
Cash, end of year $ - $ - $ -
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
20
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------
Formation and Business
----------------------
IDS/Jones Growth Partners 89-B, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on March 7, 1989, pursuant to a public offering.
The Partnership was formed to acquire, develop and operate cable television
systems. Jones Cable Corporation, a Colorado corporation, is the "Managing
General Partner." IDS Cable Corporation, a Minnesota corporation, is the
"Supervising General Partner." Jones Intercable, Inc. ("Intercable"), the
parent of the Managing General Partner, manages the Partnership. Intercable and
its subsidiaries also own and operate cable television systems as well as manage
cable television systems for other limited partnerships for which it is general
partner and, also, for affiliated entities.
Contributed Capital
-------------------
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contributions to partnership capital.
The Managing General Partner and the Supervising General Partner purchased
their interests in the Partnership by contributing $250 each to partnership
capital.
All profits and losses of the Partnership are allocated 99 percent to the
limited partners, 1/2 percent to the Managing General Partner and 1/2 percent to
the Supervising General Partner, except for income or gain from the sale or
disposition of cable television properties, which will be allocated to the
partners based upon the formula set forth in the Partnership Agreement and
interest income earned prior to the first acquisition by the Partnership of a
cable television system, which was allocated 100 percent to the limited
partners.
Formation of Joint Venture
--------------------------
On May 30, 1990, the Partnership and IDS/Jones Growth Partners II, L.P.
("Growth Partners II"), an affiliated Colorado limited partnership, formed a
Colorado general partnership known as IDS/Jones Joint Venture Partners (the
"Venture"). The Venture was formed for the purpose of acquiring the cable
television system serving the communities of Aurora, North Aurora, Montgomery,
Plano, Oswego, Sandwich, Yorkville and certain unincorporated areas of Kendall
and Kane Counties, all in the state of Illinois (the "Aurora System"). Under
the joint venture agreement between the joint venture partners, profits, losses
and distributions of the Venture will be shared in proportion to total capital
contributions made by the individual venture partners. Final Venture
capitalization was accomplished through contributions by Growth Partners II of
$37,592,709, the Partnership of $14,008,000, Intercable of $2,872,000 and IDS
Management Corporation of $2,872,000. As a result of their equity contributions
to the Venture, IDS Management Corporation and Intercable each have a 5 percent
equity interest in the Venture, Growth Partners II has a 66 percent interest and
the Partnership has a 24 percent interest.
21
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Records
------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Partnership's tax returns are also prepared on the accrual basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management 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.
Investment in Cable Television Joint Venture
--------------------------------------------
The investment in the Venture is accounted for under the equity method.
The Venture incurred losses of $8,378,240, $9,171,199 and $8,899,892 in 1996,
1995 and 1994, respectively, of which $2,044,291, $2,237,773 and $2,171,573,
respectively, were allocated to the Partnership. The operations of the Venture
are significant to the Partnership and should be reviewed in conjunction with
these financial statements. Reference is made to the accompanying financial
statements of the Venture on pages 25 to 35.
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
-----------------------------------------------------
Management Fees, Supervision Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------------------------
Intercable manages the Partnership and the Venture and receives a fee for
its services equal to 5 percent of the gross revenues of the Venture, excluding
revenues from the sale of cable television systems or franchises. Management
fees paid by the Venture to Intercable during the years ended December 31, 1996,
1995 and 1994 (reflecting the Partnership's 24 percent interest in the Venture)
were $224,412, $205,703 and $187,739, respectively.
The Supervising General Partner participates in certain management
decisions of the Partnership and receives a fee for their services equal to 1/2
percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises. Supervision fees paid by the Venture
to the Supervising General Partner during the years ended December 31, 1996,
1995 and 1994 (reflecting the Partnership's 24 percent interest in the Venture)
were $22,441, $20,570 and $18,774, respectively.
Any Partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners,
1/2 percent to the Managing General Partner and 1/2 percent to the Supervising
General Partner. Any distributions other than interest income on limited
partner subscriptions earned prior to the acquisition of the Partnership's first
cable television system or from cash flow, such as from the sale or refinancing
of a system or upon dissolution of the Partnership, will be made as follows:
first, to the limited partners in an amount which, together with all prior
distributions, will equal 125 percent of the amount initially contributed to the
Partnership capital by the limited partners; the balance, 75 percent to the
limited partners, 12-1/2 percent to the Managing General Partner and 12-1/2
percent to the Supervising General Partner. As of December 31, 1996, the
Partnership had made no such distributions.
The Partnership reimburses Intercable for certain allocated overhead and
administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Partnership. Such services, and their related costs, are necessary to the
operations of the Venture and would have been incurred by the Venture if it was
a stand alone entity. Allocations of personnel costs are based on actual time
spent by employees of Intercable with respect to each partnership managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture's revenues to the total revenues of all systems owned or managed by
Intercable and certain of its affiliates. Systems owned by Intercable and all
other systems owned by partnerships for which Intercable or affiliates are the
general partners are also allocated a proportionate share of these expenses.
The Managing General Partner believes that the methodology used in allocating
overhead and administrative expenses is reasonable. Reimbursements made to
Intercable by the Partnership for allocated overhead and administrative expenses
during the years ended December 31, 1996, 1995 and 1994 (reflecting the
Partnership's 24 percent interest in the Venture) were $296,488, $297,312
and $286,408, respectively. The Supervising General Partners may also be
reimbursed for
22
certain expenses incurred on behalf of the Partnership. There were no
reimbursements made to the Supervising General Partner by the Venture for
allocated overhead and administrative expenses during the years ended December
31, 1996, 1995 and 1994.
(4) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by the Managing
General Partner.
The Partnership's tax returns, the qualification of the Partnership as such
for tax purposes, and the amount of distributable partnership income or loss are
subject to examination by federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.
Taxable loss reported by the partners is different from that reported in
the statements of operations due to the difference in depreciation allowed under
generally accepted accounting principles and the expense allowed for tax
purposes under the Modified Accelerated Cost Recovery System (MACRS). There are
no other significant differences between taxable loss and the net loss reported
in the statements of operations.
23
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of IDS/Jones Joint Venture Partners:
We have audited the accompanying balance sheets of IDS/JONES JOINT VENTURE
PARTNERS (a Colorado general partnership) as of December 31, 1996 and 1995, and
the related statements of operations, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Managing General Partner's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of IDS/Jones Joint Venture
Partners as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 7, 1997.
24
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
BALANCE SHEETS
--------------
December 31,
----------------------------
ASSETS 1996 1995
------ ------------- -------------
CASH $ 39,236 $ 6,803
TRADE RECEIVABLES, less allowance for
doubtful receivables of $183,205 and $49,993 at
December 31, 1996 and 1995, respectively 486,278 463,098
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 42,616,023 38,380,661
Less- accumulated depreciation (20,360,651) (17,672,119)
------------ ------------
22,255,372 20,708,542
Franchise costs and other intangible assets, net of
accumulated amortization of $50,617,891 and $43,830,221
at December 31, 1996 and 1995, respectively 23,080,104 29,867,774
------------ ------------
Total investment in cable television properties 45,335,476 50,576,316
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 397,014 402,697
------------ ------------
Total assets $ 46,258,004 $ 51,448,914
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
25
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
BALANCE SHEETS
--------------
December 31,
---------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) 1996 1995
- ------------------------------------------- ------------ ------------
LIABILITIES:
Debt $ 48,693,134 $ 45,909,122
Accounts payable-Managing General Partner 398,507 331,185
Trade accounts payable and accrued liabilities 2,649,831 2,315,955
Subscriber prepayments 64,694 62,574
------------ ------------
Total liabilities 51,806,166 48,618,836
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
Contributed capital 57,344,709 57,344,709
Accumulated deficit (62,892,871) (54,514,631)
------------ ------------
(5,548,162) 2,830,078
------------ ------------
Total liabilities and partners'
capital (deficit) $ 46,258,004 $ 51,448,914
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
26
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF OPERATIONS
------------------------
Year Ended December 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
REVENUES $18,394,451 $16,860,900 $15,388,489
COSTS AND EXPENSES:
Operating expenses 10,733,857 9,809,178 8,655,004
Management and supervision
fees and allocated overhead
from General Partners 2,226,811 2,145,841 2,020,170
Depreciation and amortization 9,926,847 10,317,694 10,601,501
----------- ----------- -----------
OPERATING LOSS (4,493,064) (5,411,813) (5,888,186)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (3,757,477) (3,767,376) (2,856,678)
Other, net (127,699) 7,990 (155,028)
----------- ----------- -----------
Total other income (expense) (3,885,176) (3,759,386) (3,011,706)
----------- ----------- -----------
NET LOSS $(8,378,240) $(9,171,199) $(8,899,892)
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
27
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
Year Ended December 31,
----------------------------------------
1996 1995 1994
----------- ----------- -----------
IDS/JONES GROWTH PARTNERS 89-B:
Balance, beginning of year $(1,349,734) $ 888,039 $ 3,059,612
Net loss for year (2,044,291) (2,237,773) (2,171,573)
----------- ----------- -----------
Balance, end of year $(3,394,025) $(1,349,734) $ 888,039
=========== =========== ===========
IDS/JONES GROWTH PARTNERS II, L.P.:
Balance, beginning of year $ 1,944,286 $ 7,960,592 $13,798,921
Net loss for year (5,496,125) (6,016,306) (5,838,329)
----------- ----------- -----------
Balance, end of year $(3,551,839) $ 1,944,286 $ 7,960,592
=========== =========== ===========
JONES INTERCABLE, INC.:
Balance, beginning of year $ 1,117,763 $ 1,576,323 $ 2,021,318
Net loss for year (418,912) (458,560) (444,995)
----------- ----------- -----------
Balance, end of year $ 698,851 $ 1,117,763 $ 1,576,323
=========== =========== ===========
IDS MANAGEMENT CORPORATION:
Balance, beginning of year $ 1,117,763 $ 1,576,323 $ 2,021,318
Net loss for year (418,912) (458,560) (444,995)
----------- ----------- -----------
Balance, end of year $ 698,851 $ 1,117,763 $ 1,576,323
=========== =========== ===========
TOTAL:
Balance, beginning of year $ 2,830,078 $12,001,277 $20,901,169
Net loss for year (8,378,240) (9,171,199) (8,899,892)
----------- ----------- -----------
Balance, end of year $(5,548,162) $ 2,830,078 $12,001,277
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
28
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF CASH FLOWS
------------------------
Year Ended December 31,
----------------------------------------
1996 1995 1994
----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(8,378,240) $(9,171,199) $ (8,899,892)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 9,926,847 10,317,694 10,601,501
Amortization of interest rate protection contract 52,500 52,500 -
Increase in trade receivables (23,180) (59,670) (37,919)
Increase in deposits, prepaid expenses and
deferred charges (130,025) (81,080) (156,732)
Increase in trade accounts payable and accrued
liabilities and subscriber prepayments 335,496 1,127,773 217,363
Increase (decrease) in advances from
Jones Intercable, Inc. 67,322 (602,764) (122,879)
----------- ----------- ------------
Net cash provided by operating activities 1,850,720 1,583,254 1,601,442
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (4,602,299) (3,871,793) (3,587,639)
----------- ----------- ------------
Net cash used in investing activities (4,602,299) (3,871,793) (3,587,639)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 7,829,712 3,016,410 40,900,085
Repayment of debt (5,045,700) (673,352) (38,938,601)
Purchase of interest rate protection contract - (105,000) -
----------- ----------- ------------
Net cash provided by financing activities 2,784,012 2,238,058 1,961,484
----------- ----------- ------------
Increase (decrease) in cash 32,433 (50,481) (24,713)
Cash, beginning of year 6,803 57,284 81,997
----------- ----------- ------------
Cash, end of year $ 39,236 $ 6,803 $ 57,284
=========== =========== ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 3,434,691 $ 2,974,550 $ 2,516,358
=========== =========== ============
The accompanying notes to financial statements
are an integral part of these statements.
29
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------
Formation and Business
----------------------
On May 30, 1990, IDS/Jones Growth Partners 89-B, Ltd. ("IDS/Jones 89-B")
and IDS/Jones Growth Partners II, L.P. ("IDS/Jones II") formed a Colorado
general partnership known as IDS/Jones Joint Venture Partners (the "Venture").
The Venture was formed for the purpose of acquiring the cable television system
serving the communities of Aurora, North Aurora, Montgomery, Plano, Oswego,
Sandwich, Yorkville and certain unincorporated areas of Kendall and Kane
Counties, all in the state of Illinois (the "Aurora System"). Under the joint
venture agreement between the joint venture partners, profits, losses and
distributions of the Venture will be shared in proportion to total capital
contributions made by the individual venture partners. Initial Venture
capitalization was accomplished through partner contributions by IDS/Jones II of
$15,992,000 and IDS/Jones 89-B of $14,008,000. On September 30, 1991, IDS/Jones
II's offering closed with limited partner subscriptions totaling $43,585,750, of
which $37,592,709 was contributed to the Venture.
On December 5, 1991, IDS Management Corporation made a $1,800,000 loan to
the Venture, which had been repaid at December 31, 1996. Also on December 5,
1991, Intercable made a $1,800,000 loan to the Venture of which $1,200,000 had
been repaid at December 31, 1996. Any amounts not repaid to Intercable are
convertible into equity in the Venture. In the first quarter of 1994, Intercable
agreed to subordinate to all other Venture debt its $1,406,647 advance to the
Venture outstanding at March 31, 1994 and IDS Management Corporation made an
additional loan of $1,000,000 to the Venture to fund principal repayments due at
the end of March 1994 on the Venture's then-outstanding term loan. The interest
rates on the respective loans, which will vary from time to time, with respect
to IDS Management Corporation's loans, are at its cost of borrowing, and, with
respect to Intercable's loans, are at its weighted average cost of borrowing. It
is anticipated that the remaining loans will be repaid over time with cash
generated from operations and borrowings from the Venture's revolving credit and
term loan. The related parties' notes will be repaid including accrued interest
in the following order: first, to Intercable the remaining $600,000 of the
$1,800,000 note dated December 5, 1991; second, to IDS Management Corporation
the $1,000,000 note dated March 30, 1994; and third, to Intercable the
$1,406,647 subordinated advance.
On December 5, 1991, Intercable made an equity investment in the Venture in
the amount of $2,872,000. Also on December 5, 1991, IDS Management Corporation
made an equity investment in the Venture of $2,872,000. As a result of their
equity contributions to the Venture, IDS Management Corporation and Intercable
each have a 5 percent equity interest in the Venture, IDS/Jones II has a 66
percent interest and IDS/Jones 89-B has a 24 percent interest. If the remaining
portion of Intercable's December 5, 1991 loan is converted to equity, the
ownership percentages will be adjusted accordingly.
Jones Cable Corporation, a Colorado corporation, is the "Managing
General Partner" and manager of IDS/Jones 89-B and IDS/Jones II. IDS Cable
Corporation, a Minnesota corporation, is the "Supervising General Partner" of
IDS/Jones 89-B. IDS Cable II Corporation, a Minnesota corporation, is the
"Supervising General Partner" of IDS/Jones II. Intercable manages the Aurora
System. Intercable and its subsidiaries also own and operate cable television
systems as well as manage cable television systems for other limited
partnerships for which it is general partner and, also, for affiliated entities.
Contributed Capital
-------------------
The capitalization of the Venture is set forth in the accompanying
statements of partners' capital.
All Venture distributions, including those made from cash flow, from the
sale or refinancing of Venture property and on dissolution of the Venture, shall
be made to the Venture partners in proportion to their respective interests in
the Venture.
30
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Records
------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Venture's tax returns are also prepared on the accrual basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner's management 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.
Allocation of Cost of Purchased Cable Television System
-------------------------------------------------------
The total purchase price of the Aurora System purchased by the Venture
was allocated as follows: first, to the fair value of net tangible assets
acquired; second, to the value of subscriber lists; third, to franchise costs;
and fourth, to costs in excess of interests in net assets purchased.
Acquisition fees paid to affiliates of the Managing General Partner and
Supervising General Partner and other acquisition costs were capitalized and
charged to intangible assets.
Property, Plant and Equipment
-----------------------------
Depreciation of property, plant and equipment is provided primarily
using the straight-line method over the following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance
and repairs are charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation are written off as certain assets become fully depreciated and are
no longer in service.
Intangible Assets
-----------------
Costs assigned to franchises, subscriber lists and costs in excess of
interests in net assets purchased will be amortized using the straight-line
method over their remaining estimated useful lives.
Franchise costs 4 years
Subscriber lists 1 year
Costs in excess of interests in
net assets purchased 34 years
Revenue Recognition
-------------------
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
Reclassification
----------------
Certain prior year amounts have been reclassified to conform to the 1996
presentation.
31
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
-----------------------------------------------------
Management Fees, Supervision Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------------------------
Intercable manages the Venture and receives a fee for its services equal to
5 percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises. Management fees paid by the Venture
to Intercable during the years ended December 31, 1996, 1995 and 1994 were
$919,723, $843,045 and $769,424, respectively.
The Supervising General Partners participate in certain management
decisions of the Venture and receives a fee for their services equal to 1/2
percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises. Supervision fees paid by the Venture
to the Supervising General Partners during the years ended December 31, 1996,
1995 and 1994 were $91,972, $84,305 and $76,942, respectively.
The Venture reimburses Intercable for certain allocated overhead and
administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel, rent, data processing services and other
corporate facilities costs. Such personnel provide engineering, marketing,
administrative, accounting, legal and investor relations services to the
Venture. Such services, and their related costs, are necessary to the
operations of the Venture and would have been incurred by the Venture if it was
a stand alone entity. Allocations of personnel costs are based on actual time
spent by employees of Intercable with respect to each partnership managed.
Remaining expenses are allocated based on the pro rata relationship of the
Venture's revenues to the total revenues of all systems owned or managed by
Intercable and certain of its affiliates. Systems owned by Intercable and all
other systems owned by partnerships for which Intercable or affiliates are the
general partners are also allocated a proportionate share of these expenses.
Intercable believes that the methodology used in allocating overhead and
administrative expenses is reasonable. Reimbursements made to Intercable by the
Venture for allocated overhead and administrative expenses during the years
ended December 31, 1996, 1995 and 1994 were $1,215,116, $1,218,491 and
$1,173,804, respectively.
The Supervising General Partners may also be reimbursed for certain
expenses incurred on behalf of the Venture. There were no reimbursements made
to the Supervising General Partners by the Venture for allocated overhead and
administrative expenses during the years ended December 31, 1996, 1995 and 1994.
During 1996, the Venture was charged interest by Intercable at an
average interest rate of 8.58 percent on amounts due Intercable and on the
subordinated loans from Intercable, which approximated Intercable's weighted
average cost of borrowing. Total interest charged to the Venture by Intercable
during the years ended December 31, 1996, 1995 and 1994 was $382,725, $481,211
and $386,257, respectively.
The Venture was charged interest on the subordinated loans from IDS
Management Corporation at an average interest rate of 6.08 percent, which
approximated IDS Management Corporation's cost of borrowing. Total interest
charged to the Venture by IDS Management Corporation during 1996, 1995 and 1994
was $111,741, $120,970 and $113,458, respectively.
Any Partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners,
1/2 percent to the Managing General Partner and 1/2 percent to the Supervising
General Partner. Any distributions other than interest income on limited
partner subscriptions earned prior to the acquisition of the Partnership's first
cable television system or from cash flow, such as from the sale or refinancing
of a system or upon dissolution of the Partnership, will be made as follows:
first, to the limited partners in an amount which, together with all prior
distributions, will equal 100 percent of the amount initially contributed to the
Partnership by the limited partners; second, to the General Partners in an
amount which, together with all prior distributions, will equal the amount
contributed to the capital of the partnership by the General Partners; third, to
the limited partners in an amount which, together with all prior distributions,
will equal a 6 percent per annum cumulative and noncompounded return on the
capital contributions of the limited partners; the balance, 75 percent to the
limited partners, 12-1/2 percent to the Managing General Partner and 12-1/2
percent to the Supervising General Partner.
32
Payments to/from Affiliates for Programming Services
----------------------------------------------------
The Venture receives programming from Superaudio, Jones Education
Company and Product Information Network, all of which are affiliates of
Intercable.
Payments to Superaudio totaled $27,973, $23,928 and $23,558, respectively,
in 1996, 1995 and 1994. Payments to Jones Education Company totaled $90,418,
$76,741 and $33,768, respectively, in 1996, 1995 and 1994.
The Venture receives a commission from Product Information Network based on
a percentage of advertising revenue and number of subscribers. Product
Information Network paid commissions to the Venture totaling $46,841, $29,347
and $11,442 in 1996, 1995 and 1994, respectively.
(4) PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment as of December 31, 1996 and 1995, consisted
of the following:
1996 1995
------------ ------------
Cable distribution systems $ 41,144,449 $ 36,726,927
Equipment and tools 686,650 661,881
Office furniture and equipment 318,341 290,671
Vehicles 387,298 622,722
Buildings 79,285 78,460
------------ ------------
42,616,023 38,380,661
Less- accumulated depreciation (20,360,651) (17,672,119)
------------ ------------
$ 22,255,372 $ 20,708,542
============ ============
(5) DEBT
----
Debt consists of the following: December 31,
---------------------------
1996 1995
------------ ------------
Lending institutions-
Revolving credit agreement $ 45,600,000 $ 40,800,000
Affiliated entities-
Subordinated loans:
Intercable 2,006,647 3,206,647
IDS Management Corporation 1,000,000 1,800,000
Capital lease obligations 86,487 102,475
------------ ------------
$ 48,693,134 $ 45,909,122
============ ============
On December 5, 1991, IDS Management Corporation made a $1,800,000 loan to
the Venture, which had been repaid at December 31, 1996. Also on December 5,
1991, Intercable made a $1,800,000 loan to the Venture of which $1,200,000 had
been repaid at December 31, 1996. Any amounts not repaid to Intercable are
convertible into equity in the Venture. In the first quarter of 1994, Intercable
agreed to subordinate to all other Venture debt its $1,406,647 advance to the
Venture outstanding at March 31, 1994 and IDS Management Corporation made an
additional loan of $1,000,000 to the Venture to fund principal repayments due at
the end of March 1994 on the Venture's then-outstanding term loan. The interest
rates on the respective loans, which will vary from time to time, with respect
to IDS Management Corporation's loans, are at its cost of borrowing, and, with
respect to Intercable's loans, are at its weighted average cost of borrowing.
It is anticipated that the remaining loans will be repaid over time with cash
generated from operations and borrowings from the Venture's revolving credit and
term loan. The related parties' notes will be repaid including accrued interest
in the following order: first, to Intercable the remaining $600,000 of the
$1,800,000 note dated December 5, 1991; second, to IDS Management Corporation
the $1,000,000 note dated March 30, 1994; and third, to Intercable the
$1,406,647 subordinated advance.
33
The Venture is a party to a revolving credit and term loan agreement with
two commercial banks. In the fourth quarter of 1996, the General Partner amended
the credit facility to extend the revolving credit period and increase the
commitment to $47,000,000. The amended agreement allows for a reducing revolving
commitment that will begin to reduce quarterly on June 30, 1999 until December
31, 1999, at which time the commitment will reduce to zero and all principal and
interest amounts will be due and payable in full. At December 31, 1996,
$45,600,000 was outstanding under this agreement, leaving $1,400,000 available
for future needs of the Venture, subject to certain financial covenants that may
limit borrowing. Interest on the credit facility is at the Venture's option of
the Prime Rate plus .625 percent, the London Interbank Offered Rate plus 1.625
percent or the Certificate of Deposit Rate plus 1.75 percent. The effective
interest rates on outstanding obligations to non-affiliates as of December 31,
1996 and 1995 were 7.38 percent and 7.83 percent, respectively.
On December 5, 1991, Intercable made an equity investment in the Venture in
the amount of $2,872,000. Also on December 5, 1991, IDS Management Corporation
made an equity investment in the Venture of $2,872,000. As a result of their
equity contributions to the Venture, IDS Management Corporation and Intercable
each have a 5 percent equity interest in the Venture, IDS/Jones II has a 66
percent interest and IDS/Jones 89-B has a 24 percent interest. If the remaining
portion of Intercable's December 5, 1991 loan is converted to equity, the
ownership percentages will be adjusted accordingly.
In January 1995, the Venture entered into an interest rate protection
contract covering outstanding debt obligations of $25,000,000. The Venture paid
a fee of $105,000. The agreement protects the Venture from LIBOR interest rates
that exceed 9 percent for two years from the date of the agreement. The fee is
being charged to interest expense over the life of the agreement using the
straight-line method.
Installments due on debt principal for each of the five years in the period
ending December 31, 2001 and thereafter, respectively, are: $3,032,593,
$25,946, $45,625,946, $8,649, $-0- and $-0-.
At December 31, 1996, the carrying amount of the Venture's long-term debt
did not differ significantly from the estimated fair value of the financial
instruments. The fair value of the Venture's long-term debt is estimated based
on the discounted amount of future debt service payments using rates of
borrowing for a liability of similar risk.
(6) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Venture are prepared and filed by the Managing
General Partner.
The Venture's tax returns, the qualification of the Venture as a
partnership for tax purposes, and the amount of distributable Partnership income
or loss are subject to examination by federal and state taxing authorities. If
such examinations result in changes with respect to the Venture qualification as
a partnership, or in changes with respect to the Venture's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.
Taxable income or loss reported by the partners is different from that
reported in the statements of operations due to the difference in depreciation
recognized under generally accepted accounting principles and the expense
allowed for tax purposes under the Modified Accelerated Cost Recovery System
(MACRS). There are no other significant differences between taxable loss and
the net loss reported in the statements of operations.
34
(7) COMMITMENTS AND CONTINGENCIES
-----------------------------
The Venture rents office and other facilities under various long-term lease
arrangements. Rent paid under such lease arrangements totaled $106,722,
$105,400 and $60,313, respectively, for the years ended December 31, 1996, 1995
and 1994. Minimum commitments under operating leases for each of the five years
in the period ending December 31, 2001, and thereafter are as follows:
1997 $56,267
1998 48,432
1999 38,126
2000 1,394
2001 -
Thereafter -
-------
$144,219
=======
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information for the respective years is
presented below:
Year Ended December 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
Maintenance and repairs $ 141,422 $ 152,338 $ 133,849
========== ========== ==========
Taxes, other than income and payroll taxes $ 25,399 $ 23,470 $ 11,949
========== ========== ==========
Advertising $ 249,828 $ 374,340 $ 423,866
========== ========== ==========
Depreciation of property, plant and equipment $3,139,177 $3,491,637 $3,810,089
========== ========== ==========
Amortization of intangible assets $6,787,670 $6,826,057 $6,791,412
========== ========== ==========
35
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
PART III.
---------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
The Partnership itself has no officers or directors. Certain information
concerning the directors and executive officers of the Managing General Partner
is set forth below. Directors of the Managing General Partner serve until the
next annual meeting of the Managing General Partner and until their successors
shall be elected and qualified.
Name Age Positions with the Managing General Partner
- ---- --- -------------------------------------------
Glenn R. Jones 67 Chairman of the Board and Chief Executive Officer
James B. O'Brien 47 President
Kevin P. Coyle 45 Vice President of Finance
Elizabeth M. Steele 45 Vice President and Secretary
Mr. Glenn R. Jones has been Chairman of the Board of the Managing General
Partner since its formation in October 1986. Mr. Jones served as President of
the Managing General Partner until September of 1990 at which time he was
elected Chief Executive Officer. Mr. Jones has served as Chairman of the Board
of Directors and Chief Executive Officer of Jones Intercable, Inc. since its
formation in 1970, and he was President from June 1984 until April 1988. Mr.
Jones is the sole shareholder, President and Chairman of the Board of Directors
of Jones International, Ltd. He is also Chairman of the Board of Directors of
several affiliates of the Managing General Partner. Mr. Jones has been involved
in the cable television business in various capacities since 1961, is a member
of the Board of Directors and the Executive Committee of the National Cable
Television Association. Additionally, Mr. Jones is a member of the Board of
Governors for the American Society for Training and Development, and a member of
the Board of Education Council of the National Alliance of Business. Mr. Jones
is also a founding member of the James Madison Council of the Library of
Congress. Mr. Jones has been the recipient of several awards including the
Grand Tam Award in 1989, the highest award from the Cable Television
Administration and Marketing Society; the President's Award from the Cable
Television Public Affairs Association in recognition of Jones International's
educational efforts through Mind Extension University (now Knowledge TV); the
Donald G. McGannon Award for the advancement of minorities and women in cable
from the United Church of Christ Office of Communications; the STAR Award from
American Women in Radio and Television, Inc. for exhibition of a commitment to
the issues and concerns of women in television and radio; the Cableforce 2000
Accolade awarded by Women in Cable in recognition of Jones Intercable, Inc.'s
innovative employee programs; the Most Outstanding Corporate Individual
Achievement Award from the International Distance Learning Conference for his
contributions to distance education; the Golden Plate Award from the American
Academy of Achievement for his advances in distance education; the Man of the
Year named by the Denver chapter of the Achievement Rewards for College
Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and Cable's
Hall of Fame.
Mr. James B. O'Brien was elected President of the Managing General Partner
in September of 1990. Mr. O'Brien joined Jones Intercable, Inc. in January
1982. Mr. O'Brien was elected President and a Director of Jones Intercable,
Inc. in December 1989. Prior to being elected President and a Director of Jones
Intercable, Inc., Mr. O'Brien served as a Division Manager, Director of
Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice
President/Operations. As President, he is responsible for the day-to-day
operations of the cable television systems managed and owned by Jones
Intercable, Inc. Mr. O'Brien is a board member of Cable Labs, Inc., the
research arm of the cable television industry. He also serves as Vice Chairman
and a director of the Cable Television Administration and Marketing Association
and as a director and a member of the Executive Committee of the Walter Kaitz
Foundation, a
36
foundation that places people of any ethnic minority group in positions with
cable television systems, networks and vendor companies.
Mr. Kevin P. Coyle was elected Vice President of Finance of the Managing
General Partner in February 1989. Mr. Coyle is the principal financial and
accounting officer of the Managing General Partner. Mr. Coyle joined The Jones
Group, Ltd. in July 1981 as Vice President/Financial Services. He was elected
Treasurer of Jones Intercable, Inc. in August 1987, Vice President/Treasurer in
April 1988 and Group Vice President/Finance in October 1990.
Ms. Elizabeth M. Steele has served as Secretary of the Managing General
Partner since August 1987 and Vice President since February 1989. Ms. Steele
joined Jones Intercable, Inc. in August 1987 as Vice President/General Counsel
and Secretary. From August 1980 until joining Jones Intercable, Inc., Ms.
Steele was an associate and then a partner at the Denver law firm of Davis,
Graham & Stubbs, which serves as counsel to Jones Intercable, Inc.
Certain information concerning directors and executive officers of the
Supervising General Partner is set forth below:
Name Age Positions with the Supervising General Partner
- ---- --- ----------------------------------------------
Lori J. Larson 38 President and Director
Morris Goodwin, Jr. 45 Vice President, Treasurer and Director
Bradley C. Nelson 32 Vice President and Director
Ronald W. Powell 52 Vice President
John M. Knight 44 Vice President
Ms. Lori J. Larson has been employed by American Express Financial
Corporation since 1981 and currently holds the title of President. Since
August 1988, she has been responsible for day-to-day management of vendor
relationships, due diligence review, and operational aspects for various limited
partnerships distributed by American Express Financial Advisors Inc. In
addition, Ms. Larson is responsible for product development of the publicly
offered mutual funds in the IDS Mutual Fund Group.
Mr. Morris Goodwin, Jr. has served as Vice President and Treasurer of
American Express Financial Corporation since July 1989. From January 1988 to
July 1989, he had been the Chief Financial Officer and Treasurer of IDS Bank &
Trust Company. From January 1980 to January 1988, he was a Vice President with
Morgan Stanley, an investment banking business headquartered in New York.
Mr. Bradley C. Nelson joined American Express Financial Corporation in 1991
as an Investment Department analyst following his graduation from Cornell
University's Johnson Graduate School of Management where he earned an MBA with a
concentration in finance.
Mr. Ronald W. Powell has held the position of Vice President and Assistant
General Counsel with American Express Financial Corporation since November 1985.
He has been a member of the American Express Financial Corporation law
department since 1975.
Mr. Knight joined American Express Financial Corporation in July 1975. He
is currently Controller-Variable Assets and charged with the overall finance
responsibilities for Mutual Funds, Limited
37
Partnerships, Variable Annuities and Wealth Management Services. From 1981 to
March 1994, he held a number of positions in the IDS Certificate Company,
leading to Controller of that organization.
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
The Partnership has no employees; however, various personnel are required
to operate cable television systems owned by the Venture. Such personnel are
employed by Intercable and, pursuant to the terms of the Partnership's limited
partnership agreement, the cost of such employment is charged by the Managing
General Partner to the Partnership as a direct reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
----------------------------------------------------------------------
As of March 4, 1997, no person or entity owned more than 5 percent of the
limited partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
The Managing General Partner and its affiliates engage in certain
transactions with the Partnership as contemplated by the limited partnership
agreement of the Partnership. The Managing General Partner believes that the
terms of such transactions are generally as favorable as could be obtained by
the Partnership from unaffiliated parties. This determination has been made by
the Managing General Partner in good faith, but none of the terms were or will
be negotiated at arm's-length and there can be no assurance that the terms of
such transactions have been or will be as favorable as those that could have
been obtained by the Partnership from unaffiliated parties.
The Supervising General Partner and its affiliates engage in certain
transactions with the Partnership as contemplated by the limited partnership
agreement of the Partnership. The Supervising General Partner believes that the
terms of such transactions, which are set forth in the Partnership's limited
partnership agreement, are generally as favorable as could be obtained by the
Partnership from unaffiliated parties. This determination has been made by the
Supervising General Partner in good faith, but none of the terms were or will be
negotiated at arm's-length and there can be no assurance that the terms of such
transactions have been or will be as favorable as those that could have been
obtained by the Partnership from unaffiliated parties.
TRANSACTIONS WITH THE MANAGING GENERAL PARTNER AND THE SUPERVISING GENERAL
PARTNER
The Managing General Partner charges the Partnership a management fee, and
the Partnership reimburses Intercable, the parent of the Managing General
Partner, for certain allocated overhead and administrative expenses. These
expenses represent the salaries and benefits paid to corporate personnel, rent,
data processing services and other facilities costs. Such personnel provide
engineering, marketing, administrative, accounting, legal and investor relations
services to the Partnership. Allocations of personnel costs are based primarily
on actual time spent by employees with respect to each partnership managed.
Remaining expenses are allocated based on the pro rata relationship of the
Partnership's revenues to the total revenues of all systems owned or managed by
Intercable or its affiliates. Systems owned by Intercable and all other systems
owned by partnerships for which Intercable serves as general partner are also
allocated a proportionate share of these expenses. The Supervising General
Partner, IDS Cable Corporation, charges the Partnership for supervision fees in
accordance with the limited partnership agreement of the Partnership.
Intercable, the parent of the Managing General Partner, also advances funds
and charges interest on the balance payable. The interest rate charged
approximates Intercable's weighted average cost of borrowing.
38
TRANSACTIONS WITH AFFILIATES
Jones Education Company ("JEC") is owned 63% by Jones International, Ltd.
("International"), an affiliate of the General Partner, 9% by Glenn R. Jones,
12% by Bell Canada International Inc. ("BCI") and 16% by the General Partner.
JEC operates two television networks, JEC Knowledge TV and Jones Computer
Network. JEC Knowledge TV provides programming related to computers and
technology; business, careers and finance; health and wellness; and global
culture and languages. Jones Computer Network provides programming focused
primarily on computers and technology. JEC sells its programming to certain
cable television systems owned or managed by Intercable.
The Great American Country network provides country music video programming
to certain cable television systems owned or managed by Intercable. This
network is owned and operated by Great American Country, Inc., a subsidiary of
Jones International Networks, Ltd., an affiliate of International.
Jones Galactic Radio, Inc. is a company now owned by Jones International
Networks, Ltd., an affiliate of International. Superaudio, a joint venture
between Jones Galactic Radio, Inc. and an unaffiliated entity, provides
satellite programming to certain cable television systems owned or managed by
Intercable.
The Product Information Network Venture (the "PIN Venture") is a venture
among a subsidiary of Jones International Networks, Ltd., an affiliate of
International, and two unaffiliated cable system operators. The PIN Venture
operates the Product Information Network ("PIN"), which is a 24-hour network
that airs long-form advertising generally known as "infomercials." The PIN
Venture generally makes incentive payments of approximately 60% of its net
advertising revenue to the cable systems that carry its programming. Most of
Intercable's owned and managed systems carry PIN for all or part of each day.
Revenues received by the Venture from the PIN Venture relating to the Aurora
System totaled approximately $46,841 for the year ended December 31, 1996.
The activities of the Partnership are limited to its equity ownership in
the Venture. The charges to the Venture for related party transactions are as
follows for the periods indicated:
IDS/Jones Joint Venture Partners For the Year Ended December 31,
- -------------------------------- ----------------------------------
1996 1995 1994
---------- ---------- ----------
Management fees $ 919,723 $ 843,045 $ 769,424
----------
Supervision fees 91,972 84,305 76,942
Allocation of expenses 1,215,116 1,218,491 1,173,804
Interest expense on advances and loans
from the Managing General Partner and
Intercable 382,725 481,211 386,257
Interest expense on loan from IDS
Management Corporation 111,741 120,970 113,458
Amount of notes and advances outstanding 398,507 331,185 933,949
Highest amount of notes and advances
outstanding 1,556,731 331,185 1,040,406
Programming fees:
Jones Education Company 90,418 76,741 33,768
Superaudio 27,973 23,928 23,558
39
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a)1. See index to financial statements for list of
financial statements and exhibits thereto filed as
part of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement for IDS/Jones Growth
Partners 89-B, Ltd. (1)
10.1.1 Copy of franchise and related documents granting a
cable television system franchise for the City of
Aurora, Illinois. (1)
10.1.2 Copy of franchise and related documents granting a
cable television system franchise for Kane County,
Illinois. (2)
10.1.3 Resolution No. 91-49 dated March 12, 1991 of Kane
County extending the term of the franchise. (2)
10.1.4 Franchise Extension Agreement dated March 29, 1991
of Kane County extending the term of the
franchise. (2)
10.1.5 Resolution No. 92-54 dated March 12, 1991 of Kane
County extending the term of the franchise. (2)
10.1.6 Ordinance No. 92-133 dated June 9, 1992 of Kane
County renewing the franchise. (2)
10.1.7 Copy of franchise and related documents granting a
cable television system franchise for Kendall
County, Illinois. (1)
10.1.8 Copy of franchise and related documents granting a
cable television system franchise for the Village
of Montgomery, Illinois. (1)
10.1.9 Copy of franchise and related documents granting a
cable television system franchise for the Village
of North Aurora, Illinois. (1)
10.1.10 Copy of franchise and related documents granting a
cable television system franchise for the Village
of Oswego, Illinois. (1)
10.1.11 Copy of franchise and related documents granting a
cable television system franchise for the City of
Plano, Illinois. (1)
10.1.12 Copy of franchise and related documents granting a
cable television system franchise for the City of
Sandwich, Illinois. (1)
10.1.12 Copy of franchise and related documents granting a
cable television system franchise for the Village
of Yorkville, Illinois. (1)
10.2.1 Credit Agreement dated as of November 3, 1994
among the Venture, IDS/Jones 89-B, Growth Partners
II and Shawmut Bank Connecticut, N.A., as agent
for various lenders. (4)
10.2.2 Second Amendment Agreement dated as of December
27, 1996 among the Venture and Shawmut Bank
Connecticut, N.A., as agent for various lenders.
40
10.2.3 Two Promissory Notes both dated December 5, 1991,
each in the principal amount of $1,800,000 from
the Venture, payable to the order, respectively,
of IDS Management Corporation and Jones
Intercable, Inc. (3)
27 Financial Data Schedule
__________
(1) Incorporated by reference from the Annual Report
on Form 10-K of IDS/Jones Growth Partners II
(Commission File No. 0-18133) for fiscal year
ended December 31, 1990.
(2) Incorporated by reference from the Annual Report
on Form 10-K of IDS/Jones Growth Partners II
(Commission File No. 0-18133) for fiscal year
ended December 31, 1992.
(3) Incorporated by reference from the Annual Report
on Form 10-K of IDS/Jones Growth Partners II
(Commission File No. 0-18133) for fiscal year
ended December 31, 1991.
(4) Incorporated by reference from the Annual Report
on Form 10-K of IDS/Jones Growth Partners 89-B,
Ltd. (Commission File No. 0-17734) for fiscal year
ended December 31, 1994
(b) Reports on Form 8-K
-------------------
None.
41
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.
IDS/JONES GROWTH PARTNERS 89-B, LTD.
a Colorado limited partnerships
By Jones Cable Corporation,
their Managing General Partner
By:________________________________________
Glenn R. Jones
Chairman of the Board and
Dated: March 24, 1997 Chief Executive Officer
By IDS Cable Corporation,
their Supervising General Partner
By:________________________________________
Lori J. Larson
Dated: March 24, 1997 President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OFFICERS AND DIRECTORS OF JONES CABLE CORPORATION:
By:________________________________________
Glenn R. Jones
Chairman of the Board and
Chief Executive Officer
Dated: March 24, 1997 (Principal Executive Officer)
By:________________________________________
Kevin P. Coyle
Vice President/Finance
(Principal Financial and
Dated: March 24, 1997 Accounting Officer)
42
OFFICERS AND DIRECTORS OF IDS CABLE CORPORATION:
By:________________________________________
Lori J. Larson
President and Director
Dated: March 24, 1997 (Principal Executive Officer)
By:________________________________________
Morris Goodwin, Jr.
Vice President, Treasurer and Director
(Principal Financial and
Dated: March 24, 1997 Accounting Officer)
By:________________________________________
Bradley C. Nelson
Dated: March 24, 1997 Vice President and Director
43