FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1999.
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
Commission file number: 0-17734
IDS/JONES GROWTH PARTNERS 89-B, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in its charter
Colorado 84-1060546
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
-----------------------------------------------
Address of principal executive office
(215) 665-1700
-----------------------------
Registrant's telephone number
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 _____
_____
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
September 30, December 31,
ASSETS 1999 1998
------ ------------- ------------
Investment in cable television joint venture $ 354,561 $ 413,687
------------- ------------
Total assets $ 354,561 $ 413,687
============= ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 10,367 $ -
------------- ------------
Total liabilities 10,367 -
------------- ------------
PARTNERS' CAPITAL:
General Partners-
Contributed capital 500 500
Accumulated deficit (500) (500)
------------- ------------
- -
------------- ------------
Limited Partners-
Contributed capital (63,383 units
outstanding at September 30, 1999 and
December 31, 1998) 12,623,901 12,623,901
Distributions (12,447,247) (12,447,247)
Accumulated earnings 167,540 237,033
------------- ------------
344,194 413,687
------------- ------------
Total liabilities and partners' capital $ 354,561 $ 413,687
============= ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
OTHER EXPENSE $ (1,759) $ - $ (10,367) $ -
EQUITY IN NET LOSS OF
CABLE TELEVISION
JOINT VENTURE $ (2,324) $ (331,126) $ (59,126) $ (907,350)
----------- ----------- ----------- -----------
NET LOSS $ (4,083) $ (331,126) $ (69,493) $ (907,350)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partners $ - $ (3,311) $ - $ (9,073)
=========== =========== =========== ===========
Limited Partners $ (4,083) $ (327,815) $ (69,493) $ (898,277)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (.07) $ (5.17) $ (1.10) $ (14.17)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 63,383 63,383 63,383 63,383
=========== =========== =========== ===========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
For the Nine Months Ended
September 30,
------------------------------
1999 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (69,493) $ (907,350)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Equity in net loss of Cable Television
Joint Venture 59,126 907,350
Increase in accounts payable and accrued liabilities 10,367 -
------------ ------------
Net cash provided by operating activities - -
------------ ------------
Net change in cash - -
Cash, beginning of period - -
------------ ------------
Cash, end of period $ - $ -
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ -
============ ============
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements for
unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a complete presentation of the Balance Sheets
and Statements of Operations and Cash Flows in conformity with generally
accepted accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of IDS/Jones Growth Partners
89-B, Ltd. (the "Partnership") at September 30, 1999 and December 31, 1998 and
its Statements of Operations for the three and nine month periods ended
September 30, 1999 and 1998 and its Statements of Cash Flows for the nine month
periods ended September 30, 1999 and 1998.
The Partnership owns a 24.4 percent interest in IDS/Jones Joint Venture
Partners (the "Venture") through a capital contribution of $14,008,000 made in
1990. The Venture acquired 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") on May 31, 1990. As discussed below, the Venture
sold the Aurora System on December 4, 1998. Jones Cable Corporation, a Colorado
corporation, is the "Managing General Partner."
The Partnership's investment in the Venture is accounted for using the
equity method. At September 30, 1999, the Partnership had recorded an investment
in the Venture of $354,561.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in Jones Intercable, Inc. ("Intercable"), the parent
of the Managing General Partner, for aggregate consideration of $706.3 million.
Comcast acquired an additional 1.0 million shares of Intercable's Class A Common
Stock on June 29, 1999 for $50.0 million in a private transaction. Upon
completion of these transactions, Comcast owns approximately 13.8 million shares
of Intercable's Class A Common Stock and approximately 2.9 million shares of
Intercable's Common Stock, representing 39.6% of the economic interest and 48.3%
of the voting interest in Intercable. Comcast has contributed its shares in
Intercable to its wholly owned subsidiary, Comcast Cable Communications, Inc.
("Comcast Cable"). The approximately 2.9 million shares of Common Stock owned by
Comcast Cable represent shares having the right to elect approximately 75% of
the Board of Directors of Intercable. Intercable is now a consolidated public
company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Intercable on April 7, 1999, all of the persons who were executive officers of
Intercable as of that date terminated their employment with Intercable.
Intercable's Board of Directors has elected new executive officers, each of whom
also is an officer of Comcast. As of July 7, 1999, all persons who were employed
at Intercable's former corporate offices in Englewood, Colorado had terminated
their employment with Intercable. Intercable's corporate offices are now located
at 1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
(2) On December 4, 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. The Venture
repaid all of its indebtedness, settled working capital adjustments, deposited
$3,283,500 into an interest-bearing indemnity escrow account and distributed
remaining net sales proceeds of $51,374,610 to its four partners. The
Partnership received $12,549,640, or 24.4 percent, of the $51,374,610
distribution. The Partnership in turn paid its remaining liabilities totaling
$102,393 and then it distributed the remaining balance of $12,447,247 to its
limited partners.
The $3,283,500 of the sale proceeds placed in the interest-bearing
indemnity escrow account will remain in escrow until November 15, 1999 as
security for the Venture's agreement to indemnify the buyer under the asset
purchase agreement. The Venture's primary exposure, if any, will relate to the
representations and warranties made about the Aurora System in the asset
purchase agreement. Any amounts remaining from this interest-bearing indemnity
escrow account and not claimed by the buyer at the end of the escrow period,
plus interest earned on escrowed funds, will be returned to the Venture. From
this amount, the Venture will pay its remaining liabilities, which totaled
$1,953,514 at September 30, 1999, and then the Venture will distribute the
remaining balance, if any, to its four partners. From its
5
share of this amount, the Partnership will pay its remaining liabilities, which
totaled $10,367 at September 30, 1999 and it will retain funds necessary to
cover the administrative expenses of the Partnership.
(3) The Managing General Partner manages the Partnership and the Venture and
received a fee for its services equal to 5 percent of the gross revenues of the
Aurora System, excluding revenues from the sale of cable television systems or
franchises, until its sale on December 4, 1998. The Managing General Partner has
not received and will not receive a management fee after December 4, 1998.
Management fees paid during the three and nine month periods ended September 30,
1998 (reflecting the Partnership's 24.4 percent interest in the Venture) were
$67,111 and $196,700, respectively.
IDS Cable Corporation (the "Supervising General Partner") participated in
certain management decisions of the Partnership and the Venture and received a
fee for its services equal to 1/2 percent of the Partnership's portion of the
gross revenues of the Aurora System, excluding revenues from the sale of cable
television systems or franchises. The Supervising General Partner has not
received and will not receive a supervision fee after December 4, 1998.
Supervision fees paid during the three and nine month periods ended September
30, 1998 (reflecting the Partnership's 24.4 percent interest in the Venture)
were $6,711 and $19,670, respectively.
The Venture will continue to reimburse Intercable for certain
administrative expenses. These expenses represent the salaries and related
benefits paid for corporate personnel. Such personnel provide administrative,
accounting, tax, legal and investor relations services to the Venture and its
constituent partnerships. Such services, and their related costs, are necessary
to the administration of the Venture and its constituent partnerships. Such
costs were charged to operating costs during the periods that the Venture
operated its cable television system. Subsequent to the sale of the Venture's
cable television system, such costs were charged to other expense.
Reimbursements made to Intercable by the Venture for overhead and administrative
expenses during the three and nine month periods ended September 30, 1999
(reflecting the Partnership's 24.4 percent interest in the Venture) were $2,673
and $6,530, respectively, as compared to $75,358 and $227,710, respectively, for
the three and nine month periods ended September 30, 1998.
The Supervising General Partner may also be reimbursed for certain expenses
incurred on behalf of the Venture. There were no reimbursements made to the
Supervising General Partner during the three and nine month periods ended
September 30, 1999 and 1998.
6
(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
September 30, 1999 December 31, 1998
ASSETS ------------------ -----------------
------
Proceeds from sale in interest-bearing
escrow account $ 3,406,631 $ 3,283,500
------------------ -----------------
Total assets $ 3,406,631 $ 3,283,500
================== =================
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Accounts payable and accrued liabilities $ 1,953,514 $ 1,588,062
Partners' contributed capital 57,344,709 57,344,709
Distributions (51,374,610) (51,374,610)
Accumulated deficit (4,516,982) (4,274,661)
------------------ -----------------
Total liabilities and partners' capital $ 3,406,631 $ 3,283,500
================== =================
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Revenues $ - $ 5,500,894 $ - $16,122,933
Operating expenses - 2,997,425 - 8,754,851
Management and supervision fees and
allocated overhead from
General Partners - 611,394 - 1,820,001
Depreciation and amortization - 2,207,141 - 6,313,083
----------- ----------- ----------- -----------
Operating loss - (315,066) - (765,002)
----------- ----------- ----------- -----------
Interest expense (33,987) (891,653) (90,866) (2,786,417)
Interest income on escrowed proceeds 36,939 - 123,131 -
Other, net (12,477) (150,355) (274,586) (167,231)
----------- ----------- ----------- -----------
Net loss $ (9,525) $(1,357,074) $ (242,321) $(3,718,650)
=========== =========== =========== ===========
The Venture has not paid any management fees or supervision fees since the
sale of the Aurora System on December 4, 1998. Management fees paid to the
Managing General Partner by the Venture totaled $275,045 and $806,147,
respectively, for the three and nine months ended September 30, 1998.
Supervision fees paid to the Supervising General Partner totaled $27,505 and
$80,615, respectively, for the three and nine months ended September 30, 1998.
Reimbursements for overhead and administrative expenses paid to Jones
Intercable, Inc. totaled $10,953 and $26,761, respectively, for the three and
nine months ended September 30, 1999 compared to $308,844 and $933,239,
respectively, for the comparable 1998 periods.
7
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership owns a 24.4 percent interest in the Venture. The Venture
owned the Aurora System until its sale on December 4, 1998. The Partnership's
investment in the Venture is accounted for under the equity method. The
Partnership's investment in the Venture decreased by $59,126, which represents
the Partnership's share of losses generated by the Venture during the nine
months ended September 30, 1999.
On December 4, 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. The Venture
repaid all of its indebtedness, settled working capital adjustments, deposited
$3,283,500 into an interest-bearing indemnity escrow account and distributed
remaining net sales proceeds of $51,374,610 to its four partners. The
Partnership received $12,549,640, or 24.4 percent, of the $51,374,610
distribution. The Partnership in turn paid its remaining liabilities totaling
$102,393 and then it distributed the remaining balance of $12,447,247 to its
limited partners.
The $3,283,500 of the sale proceeds placed in the interest-bearing
indemnity escrow account will remain in escrow until November 15, 1999 as
security for the Venture's agreement to indemnify the buyer under the asset
purchase agreement. The Venture's primary exposure, if any, will relate to the
representations and warranties made about the Aurora System in the asset
purchase agreement. Any amounts remaining from this interest-bearing indemnity
escrow account and not claimed by the buyer at the end of the escrow period,
plus interest earned on escrowed funds, will be returned to the Venture. From
this amount, the Venture will pay its remaining liabilities, which totaled
$1,953,514 at September 30, 1999, and then the Venture will then distribute the
balance, if any, to its four partners. From its share of this amount, the
Partnership will pay its remaining liabilities, which totaled $10,367 at
September 30, 1999 and it will retain funds necessary to cover the
administrative expenses of the Partnership.
Because the Venture has sold all of its assets and no further distributions
are expected to be made, transfers of limited partnership interests would have
no economic or practical value. The Managing General Partner therefore has
determined, in accordance with the authority granted to it under Section 3.5 of
the Partnership's limited partnership agreement, that it will not process any
transfers of limited partnership interests in the Partnership during the
remainder of the Partnership's term.
RESULTS OF OPERATIONS
- ---------------------
The Venture sold its Aurora System on December 4, 1998 and ceased
operations as of such date. Because the Aurora System was the Venture's only
operating asset, a discussion of results of operations would not be meaningful.
The Venture incurred other expenses totaling $274,586 in the first nine months
of 1999, which primarily related to various costs associated with the sale of
the Aurora System and the administration of the Venture and the Partnership.
8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IDS/JONES GROWTH PARTNERS 89-B, LTD.
BY: JONES CABLE CORPORATION
Managing General Partner
By: /S/ Lawrence S. Smith
------------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
------------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: November 12, 1999
10