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 March 31, 1999.
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[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
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Commission file number: 0-17734
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 I.R.S. employer I.D. #
1500 Market Street, Philadelphia, PA 19102-2148
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Address of principal executive office
(215) 665-1700
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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
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IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
March 31, December 31,
ASSETS 1999 1998
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Investment in cable television joint venture $ 328,664 $ 413,687
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Total assets $ 328,664 $ 413,687
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PARTNERS' CAPITAL
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PARTNERS' CAPITAL:
General Partners-
Contributed capital $ 500 $ 500
Accumulated deficit (500) (500)
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- -
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Limited Partners-
Contributed capital (63,383 units
outstanding at March 31, 1999 and
December 31, 1998) 12,623,901 12,623,901
Distributions (12,447,247) (12,447,247)
Accumulated earnings 152,010 237,033
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328,664 413,687
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Total partners' capital $ 328,664 $ 413,687
============= ================
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
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IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
----------------------------
1999 1998
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EQUITY IN NET LOSS OF CABLE TELEVISION JOINT VENTURE $ (85,023) $(271,451)
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NET LOSS $ (85,023) $(271,451)
========= =========
ALLOCATION OF NET LOSS:
General Partners $ - $ (2,715)
========= =========
Limited Partners $ (85,023) $(268,736)
========= =========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (1.34) $ (4.24)
========= =========
WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 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 Three Months Ended
March 31,
-----------------------------
1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (85,023) $(271,451)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss of Cable Television Joint Venture 85,023 271,451
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Net cash provided by operating activities - -
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Net change in cash - -
Cash, beginning of period - -
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Cash, end of period $ - $ -
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SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ -
========= =========
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
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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 March 31, 1999 and December 31, 1998 and its
Statements of Operations and Cash Flows for the three months ended
March 31, 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 March 31, 1999 the Partnership had recorded an investment in
the Venture of $328,664.
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, Inc. ("Intercable").
Comcast now owns approximately 12.8 million shares of Intercable's Class A
Common Stock and approximately 2.9 million shares of Intercable's Common Stock,
representing approximately 37% of the economic interest and 47% of the voting
interest in Intercable. Also on that date, Comcast contributed its shares in
Intercable to Comcast's wholly owned subsidiary, Comcast Cable Communications,
Inc. ("Comcast Cable"). The approximately 2.9 million shares of Common Stock of
Intercable owned by Comcast represents approximately 57% of the outstanding
Common Stock, which class of stock is entitled to elect 75% of the Board of
Directors of Intercable. As a result of this transaction, Intercable is now a
consolidated public company subsidiary of Comcast Cable.
Also on April 7, 1999, the bylaws of Intercable were amended to
establish the size of Intercable's Board of Directors as a range from eight to
thirteen directors and the board was reconstituted so as to have eight directors
and the following directors of Intercable resigned: Robert E. Cole, Josef J.
Fridman, James J. Krejci, James B. O'Brien, Raphael M. Solot, Robert Kearney,
Howard O. Thrall, Siim Vanaselja, Sanford Zisman and Glenn R. Jones. In
addition, Donald L. Jacobs resigned as a director elected by the holders of
Class A Common Stock and was elected by the remaining directors as a director
elected by the holders of Common Stock. The remaining directors elected the
following persons to fill the vacancies on the board created by such
resignations: Ralph J. Roberts, Brian L. Roberts, John R. Alchin, Stanley Wang
and Lawrence S. Smith. All of the newly elected directors, with the exception of
Mr. Jacobs, are officers of Comcast. Also on April 7, 1999, the following
executive officers of Intercable resigned: Glenn R. Jones, James B. O'Brien,
Ruth E. Warren, Kevin P. Coyle, Cynthia A. Winning, Elizabeth M. Steele, Wayne
H. Davis and Larry W. Kaschinske. The following persons were appointed as
executive officers of Intercable on April 7, 1999: Ralph J. Roberts, Brian L.
Roberts, Lawrence S. Smith, John R. Alchin and Stanley Wang.
Comcast is principally engaged in the development, management and
operation of broadband cable networks and in the provision of content through
programming investments. Comcast Cable is principally engaged in the
development, management and operation of broadband cable networks. The address
of Comcast's principal office is 1500 Market Street, Philadelphia, Pennsylvania
19102-2148, which is also now the address of the principal office of Intercable
and of the Managing General Partner. The address of Comcast Cable's principal
office is 1201 Market Street, Suite 2201, Wilmington, Delaware 19801.
(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 distributed these funds to its limited
partners.
5
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
$1,985,270 at March 31, 1999, and then the Venture will distribute the remaining
balance to its four partners. The Partnership and the Venture will continue in
existence at least until any amounts remaining from the interest-bearing
indemnity escrow account have been distributed. Since the Aurora System
represented the only operating asset of the Partnership and the Venture, the
Partnership and the Venture will be liquidated and dissolved upon the final
distribution of any amounts remaining from the interest-bearing indemnity escrow
account, most likely in the fourth quarter of 1999. If any disputes with respect
to the indemnification arise, the Partnership and the Venture would not be
dissolved until such disputes were resolved, which could result in the
Partnership and the Venture continuing in existence beyond 1999.
(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. Management fees paid during the three month periods ended March
31, 1999 and 1998 (reflecting the Partnership's 24.4 percent interest in the
Venture) were $-0- and $62,683, respectively. The Managing General Partner has
not and will not receive a management fee after December 4, 1998.
IDS Cable Corporation (the "Supervising General Partner") participated
in certain management decisions of the Partnership 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. Supervision fees paid during the three month periods
ended March 31, 1999 and 1998 (reflecting the Partnership's 24.4 percent
interest in the Venture) were $-0- and $6,268, respectively. The Supervising
General Partner has not and will not receive a supervision fee after December 4,
1998.
The Venture will continue to reimburse Intercable, the parent of the
Managing General Partner, 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. Such services, and their related costs, are necessary
to the administration of the Venture. Reimbursements made to Intercable by the
Venture for overhead and administrative expenses during the three month periods
ended March 31, 1999 and 1998 (reflecting the Partnership's 24.4 percent
interest in the Venture) were $1,248 and $71,944, respectively.
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 month periods ended March 31,
1999 and 1998.
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(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
March 31, 1999 December 31, 1998
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ASSETS
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Proceeds from sale in escrow $ 3,332,752 $ 3,283,500
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Total assets $ 3,332,752 $ 3,283,500
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LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Accounts payable and accrued liabilities $ 1,985,770 $ 1,588,062
Partners' contributed capital 57,344,709 57,344,709
Distributions (51,374,610) (51,374,610)
Accumulated deficit (4,623,117) (4,274,661)
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Total liabilities and partners' capital $ 3,332,752 $ 3,283,500
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UNAUDITED STATEMENTS OF OPERATIONS
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For the Three Months Ended
March 31,
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1999 1998
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Revenues $ - $ 5,137,941
Operating expenses - 2,779,999
Management and supervision fees and allocated
overhead from General Partners - 577,439
Depreciation and amortization - 1,945,088
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Operating loss - (164,585)
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Interest expense - (945,163)
Other, net (348,456) (2,756)
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Net loss $ (348,456) $ (1,112,504)
=========== ================
Management fees paid to the Managing General Partner by the Venture
totaled $-0- and $256,897, respectively, for the three months ended March 31,
1999 and 1998. Supervision fees paid to the Supervising General Partner totaled
$-0-and $25,690, respectively, for the three months ended March 31, 1999 and
1998. Reimbursements for overhead and administrative expenses paid to Intercable
totaled $5,114 and $294,852, respectively, for the three months ended March 31,
1999 and 1998.
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 $85,023, which
represents the Partnership's share of losses generated by the Venture during the
three months ended March 31, 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 distributed these funds 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
$1,985,270 at March 31, 1999, and then the Venture will distribute the remaining
balance to its four partners. The Partnership and the Venture will continue in
existence at least until any amounts remaining from the interest-bearing
indemnity escrow account have been distributed. Since the Aurora System
represented the only operating asset of the Partnership and the Venture, the
Partnership and the Venture will be liquidated and dissolved upon the final
distribution of any amounts remaining from the interest-bearing indemnity escrow
account, most likely in the fourth quarter of 1999. If any disputes with respect
to the indemnification arise, the Partnership and the Venture would not be
dissolved until such disputes were resolved, which could result in the
Partnership and the Venture continuing in existence beyond 1999.
RESULTS OF OPERATIONS
The Venture sold its Aurora System on December 4, 1998 and ceased
operations as of such date. Since the Aurora System was the Venture's and the
Partnership's last remaining operating asset, a discussion of results of
operations would not be meaningful. The Venture incurred other expenses totaling
$348,456 in the first quarter of 1999, which related to various costs associated
with the sale of the Aurora System. The Venture and the Partnership will be
liquidated and dissolved upon the final distribution of any amounts remaining
from the interest-bearing indemnity escrow account referred to above, most
likely in the fourth quarter of 1999.
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.
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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,
its Managing General Partner
By: /S/ Lawrence S. Smith
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Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
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Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: May 14, 1999
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