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FORM 10-K 405
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, 1994
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.
(Exact name of registrant as specified in its charter)
Colorado 84-1060546
State of Organization IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
(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 (Section 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
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PART I.
ITEM 1. BUSINESS
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. On December 15, 1991, Intercable made
an equity investment in the Venture in the amount of $2,872,000 and a loan of
$1,800,000 to the Venture. On that date, IDS Management Corporation also made
an equity investment of $2,872,000 in the Venture and a loan to the Venture in
the amount of $1,800,000. A portion of the $1,800,000 loan from IDS Management
Corporation was repaid in November 1994. See Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations. The loans from
Intercable and IDS Management Corporation are subordinate to the Venture's new
revolving credit and term loan. These loans matured in the fourth quarter of
1994. IDS Management Corporation extended its loan until December 5, 1995 and,
although Intercable has not formally extended its loan, it has not demanded
repayment. In the first quarter of 1994, Intercable agreed to subordinate to
all other Venture debt the $1,406,647 advance to the Venture outstanding at
March 30, 1994 and IDS Management Corporation made an additional loan of
$1,000,000 to the Venture to fund principal repayments due on the Venture's
then-outstanding term loan. In the second quarter of 1994, Intercable made a
loan of $1,000,000 to the Venture to fund principal repayments due on the
Venture's then-outstanding term loan. This loan was repaid with interest in
November 1994. The interest rates on the respective loans, which will vary
from time to time, with respect to IDS Management Corporation's loan, are at
its cost of borrowing, and, with respect to Intercable's loan, are at its
weighted average cost of borrowing. It is anticipated that the remaining loans
will be repaid over time with borrowings from the Venture's new revolving
credit and term loan. If the December 5, 1991 loans are not repaid, Intercable
and IDS Management Corporation will have the right, among other rights, to
convert these loans to equity in the Venture. As a result of their equity
contributions to the Venture, 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. If the December 5, 1991 loans are converted
to equity, the ownership percentages will be adjusted accordingly.
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.
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,
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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.
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. In addition,
advertising sales are becoming a significant source of revenue for the Aurora
System. As a result of the adoption by the FCC of new rules under the Cable
Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), and several rate regulation orders, the Aurora System's rate structures
for cable programming services and equipment have been revised. See
Regulation and Legislation. At December 31, 1994, the Aurora System's monthly
basic service rates ranged from $10.54 to $10.62, monthly basic and tier
("basic plus") service rates ranged from $21.00 to $21.08, and monthly premium
services ranged from $6.78 to $11.95 per premium service. Charges for
additional outlets have been eliminated, and charges for remote controls and
converters have been "unbundled" from the programming service rates. 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, 1994, of the total
fees received by the Aurora System, basic service and tier service fees
accounted for approximately 63% of total revenues, premium service fees
accounted for approximately 17% of total revenues, pay-per-view fees were
approximately 3% of total revenues, advertising fees were approximately 5% of
total revenues and the remaining 12% 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.
The Aurora System'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 its 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 Managing General Partner's policy with
regard to past due accounts is basically one of disconnecting service before a
past due account becomes material.
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The Aurora System 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. The Aurora System has no
employees because all properties are managed by employees of Intercable.
Intercable has engaged in research and development activities relating to the
provision of new services but the amount of the Partnership'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
Partnership.
FRANCHISES. The Aurora System is operated under non-exclusive,
fixed-term franchises or other types of operating authorities (referred to
collectively herein as "franchises") granted by local governmental
authorities. The Aurora System's franchises require that franchise fees
ranging from 3% to 5% of gross revenues of the cable system be paid to the
governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools
be provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2 for a range of
franchise expiration dates of the Aurora System.)
The responsibility for franchising of cable television systems generally
is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the
terms and conditions under which cable television systems provide service,
including the standards applicable to cable television operators seeking
renewal of a cable television franchise. In addition, the 1992 Cable Act also
made several procedural changes to the process under which a cable operator
has not substantially complied with the material terms of the franchise, has
not provided reasonable service in light of the community's needs, does not
have the financial, legal and technical ability to provide the services being
proposed for the future, or has not presented a reasonable proposal for future
service. A final decision of non-renewal by the franchising authority is
appealable in court. The Managing General Partner and its affiliates recently
have experienced lengthy negotiations with some franchising authorities for
the granting of franchise renewals and transfers. Some of the issues involved
in recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of the Venture to renew a franchise, or lengthy
negotiations or litigation involving the renewal process could have an adverse
impact on the business of the Venture.
COMPETITION. Cable television systems currently experience competition
from several sources, but two technologies, Multichannel Multipoint
Distribution Service ("MMDS") systems, commonly called wireless cable systems,
and Direct Broadcast Satellite ("DBS") systems, which distribute programming
to home satellite dishes, currently pose the greatest potential threat to the
cable television industry.
MMDS systems will likely focus on providing service to residents of rural
areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some
areas of the country, MMDS systems are now in direct competition with cable
television systems. To date, the Aurora System has not lost a significant
number of subscribers, nor a significant amount of revenue, to MMDS operators.
DBS operators deliver premium channel services and specialized
programming to subscribers by high-powered DBS satellites on a wide-scale
basis, and two major companies began operations in 1994. Subscribers are able
to receive DBS services virtually anywhere in the United States with a rooftop
or wall-mounted antenna. In some instances, DBS systems may serve as a
complement to cable television operations by enabling cable television
operators to offer additional channels of programming without the construction
of additional cable plant. DBS companies use video compression technology to
increase the channel capacity of their satellite systems to provide a wide
variety of program services that are competitive with those of cable
television systems.
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Cable television systems also compete with broadcast television, private
cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only
Earth Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings
such as condominiums, apartment complexes and private residential communities,
and TVROs are satellite receiving antenna dishes that are used by "backyard
users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service,
the LMDS, sometimes referred to as cellular television, could have the
capability of delivering approximately 50 channels, or if two systems were
combined 100 channels, of video programming to a subscriber's home, which
capacity could be increased by using video compression technology. The
Managing General Partner believes that there are not any current fully
operational LMDS systems.
Although the Aurora System has not yet encountered competition from a
telephone company entering into the business of providing video services to
subscribers, the Aurora System could potentially face competition from
telephone companies doing so. A Federal cross-ownership restriction has
historically limited entry into the cable television business by potentially
strong competitors such as telephone companies. This restriction, which is
contained in the 1984 Cable Act, has generally prohibited telephone companies
from owning or operating cable television systems within their own telephone
service areas, but several recent court decisions have eliminated this
restriction. In addition, the FCC is authorizing telephone companies to
provide video dialtone service within their service areas. Legislation is
also pending in Congress that would permit telephone companies to provide
video programming through separate subsidiaries. The Managing General
Partner cannot predict at this time to what extent current restrictions will
be modified to permit telephone companies to provide cable television services
within their own service areas in competition with cable television systems.
See Regulation and Legislation, Ownership and Market Structure for a
description of the potential participation of the telephone industry in the
delivery of cable television services. Entry into the market by telephone
companies as direct competitors of the Aurora System could adversely impact
the profitability of the Aurora System. If a telephone company were to become
a direct competitor in the Aurora System's service area, the Venture could be
at a competitive disadvantage because of the relative financial strength of a
telephone company compared to the Venture. Depending on a number of factors,
such competition could also result in cable television systems providing the
same types of services now provided by the telephone industry.
The FCC has established a new wireless telecommunications service known
as Personal Communications Service ("PCS"). It is envisioned that PCS would
provide portable non-vehicular mobile communications services similar to that
available from cellular telephone companies, but at a lower cost. PCS would
be delivered by placing numerous microcells in a particular area to be
covered, accessible to both residential and business customers. Because of
the need to link the many microcells necessary to deliver this service
economically, many parties are investigating integration of PCS with cable
television operations. Several cable television multiple systems operators
and others, including affiliates of Intercable, hold or have requested
experimental licenses from the FCC to test PCS technology. The FCC has
established spectrum auctioning procedures for PCS licenses and the licenses
are being auctioned in a series of auction events.
Cable television franchises are not exclusive, so 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. A cable television operator has announced its intent
to build and activate a video network across the Aurora System in 1995.
COMPETITION FOR SUBSCRIBERS IN THE AURORA SYSTEM. Following is a summary
of competition from DBS, MMDS, SMATV and TVRO operators in the Aurora System's
franchise areas: There is one MMDS operator in the Aurora System's service
area that provides over 30 channels at a price comparable to the Aurora
System's rates. However, at this time this MMDS operator is providing minimal
competition. DBS was offered in 1994 to all the homes passed in the Aurora
System's service area providing over 100 channels at competitive prices. The
initial cost for equipment and installation is approximately $800 to $1,200.
To date, the Aurora System has lost very few customers to DBS. However, the
Managing General Partner believes that the DBS operator represents potential
significant competition in the Aurora System. Ameritech has announced plans
to
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build a cable television system in the Naperville, Illinois area and to extend
into several other communities within the next few years. Ameritech is the
major provider of telephone services in the Naperville, Illinois area, and it
has substantially greater financial resources than the Partnership. The
Managing General Partner is uncertain at this time whether Ameritech's plans
include any of the communities located in the Aurora System.
REGULATION AND LEGISLATION. The cable television industry is regulated
through a combination of the Federal Communications Commission ("FCC"), some
state governments, and most local governments. In addition, the Copyright Act
of 1976 imposes copyright liability on all cable television systems. Cable
television operations are subject to local regulation insofar as systems
operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the
cable television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States,
including those owned and managed by Intercable, are subject to rate
regulation of basic cable services. In addition, the 1992 Cable Act allows
the FCC to regulate rates for non-basic service tiers other than premium
services in response to complaints filed by franchising authorities and/or
cable subscribers. In April 1993, the FCC adopted regulations governing rates
for basic and non-basic services. The FCC's rules became effective on
September 1, 1993.
In compliance with these rules, the Venture reduced rates charged for
certain regulated services effective September 1, 1993. These reductions
resulted in some decrease in revenues and operating income before depreciation
and amortization; however, the decrease was not as severe as originally
anticipated. The Venture has undertaken actions to mitigate a portion of
these reductions primarily through (a) new service offerings in some systems,
(b) product re-marketing and re-packaging and (c) marketing efforts directed
at non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory
scheme with respect to rates. The FCC's new regulations generally require
rate reductions, absent a successful cost-of-service showing, of 17% of
September 30, 1992 rates, adjusted for inflation, channel modifications,
equipment costs, and increases in programming costs. However, the FCC held
rate reductions in abeyance in certain systems. The new regulations became
effective on May 15, 1994, but operators could elect to defer rate reductions
to July 14, 1994, so long as they made no changes in their rates and did not
restructure service offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established
an interim industry-wide 11.25% permitted rate of return, and requested
comments on whether this standard and other interim cost-of-service standards
should be made permanent. The FCC also established a presumption that
acquisition costs above a system's book value should be excluded from the rate
base, but the FCC will consider individual showings to rebut this presumption.
The need for special rate relief will also be considered by the FCC if an
operator demonstrates that the rates set by a cost-of-service proceeding would
constitute confiscation of investment, and that, absent a higher rate, the
return necessary to operate and to attract investment could not be maintained.
The FCC will establish a uniform system of accounts for operators that elect
cost-of-service rate regulation, and the FCC has adopted affiliate transaction
regulations. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services will be indexed for inflation, and
operators will also be permitted to increase rates in response to increases in
costs beyond their control, such as taxes and increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
Venture elected to file cost-of-service showings for the Aurora System. The
Managing General Partner thus anticipates no further reduction in revenues or
operating income before depreciation and amortization resulting from the FCC's
rate
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regulations. At this time, however, the regulatory authorities have not
approved the cost-of-service showings, and there can be no assurance that the
Venture's cost-of-service showings will prevent further rate reductions until
such final approval is received.
Among other issues addressed by the FCC in its February 1994 rate orders
was the treatment of packages of a la carte channels. The FCC in its rate
regulations adopted April 1, 1993, exempted from rate regulation the price of
packages of a la carte channels upon the fulfillment of certain conditions.
On November 10, 1994, the FCC reversed its policy regarding rate regulation of
packages of a la carte services. A la carte services that are offered in a
package will now be subject to rate regulation by the FCC, although the FCC
indicated that it cannot envision circumstances in which any price for a
collective offering of premium channels that have traditionally been offered
on a per-channel basis would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge
subscribers for new cable programming services. In addition to the present
formula for calculating the permissible rate for new services, the FCC
instituted a three-year flat fee mark-up plan for charges relating to new
channels of cable programming services. Commencing on January 1, 1995,
operators may charge for new channels of cable programming services added
after May 14, 1994 at a rate of up to 20 cents per channel, but may not make
adjustments to monthly rates totaling more than $1.20 plus an additional 30
cents for programming license fees per subscriber over the first two years of
the three-year period for these new services. Operators may charge an
additional 20 cents in the third year only for channels added in that year
plus the costs for the programming. Operators electing to use the 20 cent per
channel adjustment may not also take a 7.5% mark-up on programming cost
increases, which is permitted under the FCC's current rate regulations. The
FCC has requested further comment as to whether cable operators should
continue to receive the 7.5% mark-up on increases in license fees on existing
programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they
elect so long as, among other conditions, other channels that are subject to
rate regulation are priced in conformity with applicable regulations and
operators do not remove programming services from existing tiers and offer
them on the NPT.
There have been several lawsuits filed by cable operators and programmers
in Federal court challenging various aspects of the 1992 Cable Act, including
provisions relating to mandatory broadcast signal carriage, retransmission
consent, access to cable programming, rate regulations, commercial leased
channels and public access channels. On April 8, 1993, a three-judge Federal
district court panel issued a decision upholding the constitutionality of the
mandatory signal carriage requirements of the 1992 Cable Act. That decision
was appealed directly to the United States Supreme Court. The United States
Supreme Court vacated the lower court decision on June 27, 1994 and remanded
the case to the district court for further development of a factual record.
The Supreme Court's majority determined that the must-carry rules were content
neutral, but that it was not yet proven that the rules were needed to preserve
the economic health of the broadcasting industry. In the interim, the
must-carry rules will remain in place during the pendency of the proceedings
in district court. In 1993, a Federal district court for the District of
Columbia upheld provisions of the 1992 Cable Act concerning rate regulation,
retransmission consent, restrictions on vertically integrated cable television
operators and programmers, mandatory carriage of programming on commercial
leased channels and public, educational and governmental access channels and
the exemption for municipalities from civil damage liability arising out of
local regulation of cable services. The 1992 Cable Act's provisions providing
for multiple ownership limits for cable operators and advance notice of free
previews for certain programming services have been found unconstitutional.
In November 1993, the United States Court of Appeals for the District of
Columbia held that the FCC's regulations implemented pursuant to Section 10 of
the 1992 Cable Act, which permit cable operators to ban indecent programming
on public, educational or governmental access channels or leased access
channels, were unconstitutional, but the court has agreed to reconsider its
decision. All of these decisions construing provisions of the 1992 Cable Act
and the FCC's implementing regulations have been or are expected to be
appealed.
Ownership and Market Structure. The FCC rules and Federal law generally
prohibit the direct or indirect common ownership, operation, control or
interest in a cable television system, on the one hand, and a
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local television broadcast station whose television signal reaches any portion
of the community served by the cable television system, on the other hand.
The FCC recently lifted its ban on the cross-ownership of cable television
systems by broadcast networks. The FCC revised its regulations to permit
broadcast networks to acquire cable television systems serving up to 10% of
the homes passed in the nation, and up to 50% of the homes passed in a local
market. Neither the Partnership nor Intercable nor the Managing General
Partner has any direct or indirect ownership, operation, control or interest
in a television broadcast station, or a telephone company, and they are thus
presently unaffected by the cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently,
a provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs
to acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. Several Federal district courts have struck down the
1984 Cable Act's telco/cross-ownership provision as facially invalid and
inconsistent with the First Amendment. The United States Courts of Appeals
for the Fourth and the Ninth Circuits have upheld the appeals of two of these
district court decisions, and the United States Justice Department is expected
to request the United States Supreme Court to review these two decisions.
This Federal cross-ownership rule is particularly important to the cable
industry since these telephone companies already own certain facilities needed
for cable television operation, such as poles, ducts and associated
rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies to
offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint
marketing arrangements. In its video dialtone order, which was part of a
comprehensive proceeding examining whether and under what circumstances
telephone companies should be allowed to provide cable television services,
including video programming to their customers, the FCC concluded that neither
the 1984 Cable Act nor its rules apply to prohibit the interexchange carriers
(i.e., long distance telephone companies such as AT&T) from providing such
services to their customers. Additionally, the FCC also concluded that where
a local exchange carrier ("LEC") makes its facilities available on a common
carrier basis for the provision of video programming to the public, the 1984
Cable Act does not require the LEC or its programmer customers to obtain a
franchise to provide such service. This aspect of the FCC's video dialtone
order was upheld on appeal by the United States Court of Appeals for the D.C.
Circuit. The FCC recently issued an order reaffirming its initial decision,
and this order has been appealed. Because cable operators are required to
bear the costs of complying with local franchise requirements, including the
payment of franchise fees, the FCC's decision could place cable operators at a
competitive disadvantage vis-a-vis services offered on a common carrier basis
over local telephone company provided facilities. In its Reconsideration
Order, the FCC, among other actions, refused to require telephone companies to
justify cost allocations prior to the construction of video dialtone
facilities, and indicated that it would provide guidance on costs that must be
included in proposed video dialtone tariffs. The FCC also established dual
Federal/state jurisdiction over video dialtone services based on the
origination point of the video dialtone programming service. In a separate
proceeding, the FCC has proposed to increase the numerical limit on the
population of areas qualifying as "rural" and in which LECs can provide cable
service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of Proposed
Rulemaking in its video dialtone docket. The FCC tentatively concluded that
it should not ban telephone companies from providing their own video
programming over their video dialtone platforms in those areas in which the
cable/telephone cross-ownership rules have been found unconstitutional. The
FCC requested comments on this issue and on further refinements of its video
dialtone regulatory framework concerning, among other issues, telephone
programmer affiliation standards, the establishment of structural safeguards
to prevent cross-subsidization of video
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dialtone and programming activities, and the continuation of the FCC's ban
prohibiting telephone companies from acquiring cable systems within their
telephone service areas for the provision of video dialtone services. The FCC
will also consider whether a LEC offering video dialtone service must secure a
local franchise if that LEC also engages in the provision of video programming
carried on its video dialtone platform. The FCC has also proposed to broadly
interpret its authority to waive the cable/telephone cross-ownership ban upon
a showing by telephone companies that they comply with the safeguards which
the FCC establishes as a condition of providing video programming.
A number of bills that would have permitted telephone companies to
provide cable television service within their own service areas were
considered during the last Congress, but none were adopted. These bills would
have permitted the provision of cable television service by telephone
companies in their own service areas conditioned on the establishment of
safeguards to prevent cross-subsidization between telephone and cable
television operations and the provision of telecomunication services by cable
television systems. Similar legislation is expected to be considered by
Congress during its current session. The outcome of these FCC, legislative or
court proceedings and proposals or the effect of such outcome on cable system
operations cannot be predicted.
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. While the charge for basic plus service may have increased
in 1993 in some cases as a result of the FCC's rate regulations, overall
revenues may have decreased due to the elimination of charges for additional
outlets and certain equipment. 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, 1994, the Aurora System operated approximately 700 miles of cable
plant, passing approximately 62,000 homes, representing an approximate 60%
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, ILLINOIS 1994 1993 1992
---------------- ---- ---- ----
Monthly basic plus service $21.08 $21.08 $21.45
rate
Basic subscribers 40,666 37,426 35,194
Pay units 27,856 28,283 27,912
Franchise expiration dates range from August 1995 to November 2008. Any
franchises expiring in 1995 are in the process of renewal.
PROGRAMMING SERVICES
Programming services provided by the Aurora System include local
affiliates of the national broadcast networks, local independent broadcast
channels, the traditional satellite services (e.g., American Movie Classics,
Arts & Entertainment, Black Entertainment Network, C-SPAN, The Discovery
Channel, Lifetime, Entertainment Sports Network, Home Shopping Network, Mind
Extension University, Music Television, Nickelodeon, Turner Network
Television, The Nashville Network, Video Hits One, and superstations WOR, WGN
and TBS. The Venture's Systems also provide a selection, which varies by
system, of premium channel programming (e.g., Cinemax, Encore, Home Box
Office, Showtime and The Movie Channel).
9
10
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. As of February 15, 1995, the approximate number of
equity security holders in the Partnership was 2,936.
10
11
Item 6. Selected Financial Data
For the Year Ended December 31,
-------------------------------------------------------------------------------------
IDS/Jones Growth Partners 89-B 1994 1993 1992 1991 1990
------------------------------ ---- ---- ---- ---- ----
Revenues $ - $ - $ - $ - $ -
Depreciation and
Amortization - - - - -
Operating Income - - - - -
Net Loss (2,171,573) (2,011,841) (2,005,831) (3,124,096) (3,465,434)
Net Loss
per Limited Partnership
Unit (33.92) (31.42) (31.33) (48.80) (54.07)
Weighted Average Number of
Limited Partnership
Units Outstanding 63,383 63,383 63,383 63,383 63,383
General Partners' Deficit (130,876) (109,160) (89,042) (68,984) (37,743)
Limited Partners' Capital 916,522 3,066,379 5,160,495 7,146,268 10,239,123
Total Assets 888,039 3,059,612 5,071,453 7,077,284 10,201,380
Debt - - - - -
For the Year Ended December 31,
--------------------------------------------------------------------------------------
From Inception
(May 30, 1990) to
IDS/Jones Joint Venture Partners 1994 1993 1992 1991 December 31, 1990
-------------------------------- ---- ---- ---- ---- -----------------
Revenues $15,388,489 $15,196,068 $14,486,583 $13,196,389 $7,126,678
Depreciation and Amortization 10,596,340 10,883,845 10,507,110 10,474,319 8,761,878
Operating Loss (5,883,025) (5,816,179) (5,481,821) (6,105,858) (6,234,497)
Net Loss (8,899,892) (8,245,251) (8,220,617) (10,158,372) (9,819,300)
Partners' Capital 12,001,277 20,901,169 29,146,420 37,367,037 28,740,625
Total Assets 57,752,046 64,595,970 73,796,057 80,534,496 86,603,937
Debt 43,566,064 41,604,580 43,678,543 41,825,847 52,957,545
Jones Intercable, Inc. Advances 933,949 1,056,828 345,859 486,652 284,398
11
12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
IDS/JONES GROWTH PARTNERS 89-B, LTD.
Results of Operations
All of the operations of IDS/Jones Growth Partners 89-B, Ltd. (the
"Partnership"), a Colorado limited partnership, are represented exclusively
by its interest in IDS/Jones Joint Venture Partners (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.
Financial Condition
The Partnership owns an approximate 24 percent interest in the Venture.
The Partnership's investment in this cable television joint venture, accounted
for under the equity method, decreased by $2,171,573 compared to the December
31, 1993 balance. This decrease represents the Partnership's share of losses
generated by the Venture during 1994. 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
Results of Operations
1994 Compared to 1993
Revenues of the Venture increased $192,421, or approximately 1 percent,
from $15,196,068 in 1993 to $15,388,489 in 1994. An increase in the subscriber
base primarily accounted for the increase in revenues. Basic subscribers
increased 3,240, or approximately 9 percent, from 37,426 at December 31, 1993
to 40,666 at December 31, 1994. The increase in revenues would have been
greater but for the reduction in basic rates due to basic rate regulations
issued by the FCC in April 1993 with which the Venture complied effective
September 1, 1993. See Regulation and Legislation discussed below. No other
individual factor was significant to the increase in revenues.
Operating, general and administrative expense increased $545,609, or
approximately 7 percent, from $8,109,395 in 1993 to $8,655,004 in 1994.
Increases in programming expenses, due in part to the increase in the
subscriber base, were primarily responsible for the increase in operating,
general and administrative expense. No other individual factor contributed
significantly to the increase. Operating, general and administrative expense
represented 53 percent of revenue in 1993 and 56 percent in 1994. Management
and supervision fees and allocated overhead from the General Partners
increased $1,163, less than 1 percent, from $2,019,007 in 1993 to $2,020,170
in 1994 due primarily to the increase in revenues, upon which management and
supervision fees and allocated overhead are based. The increase was partially
offset by a decrease in allocated expenses from Intercable resulting from a
change in allocation methods effective December 1, 1993.
Depreciation and amortization expense decreased $287,505, or
approximately 3 percent, from $10,883,845 in 1993 to $10,596,340 in 1994 due
to the maturation of a portion of the Venture's intangible asset base.
Operating loss increased $66,846, or approximately 1 percent, from
$5,816,179 in 1993 to $5,883,025 in 1994 due to the increases in operating,
general and administrative expense and management and supervision fees from
the General Partners exceeding the increase in revenues and the decrease in
allocated expenses and the decrease in depreciation and amortization expense.
Operating income before depreciation and amortization decreased $354,351,
or approximately 7 percent, from $5,067,666 in 1993 to $4,713,315 in 1994 due
to the increases in operating, general and administrative expense and
management and supervision fees from the General Partners exceeding the
increase in revenues. The decrease in operating income before depreciation
and amortization reflects the current operating environment of the cable
television industry. The FCC rate regulations under the 1992 Cable Act have
caused revenues to increase more slowly than otherwise would have been the
case. In turn, this has caused certain expenses which are a function of
revenue, such as franchise fees, copyright fees and management fees, to
increase more slowly than in prior years. However, other operating costs such
as
12
13
programming fees, salaries and benefits, and marketing costs as well as other
costs incurred by Jones Intercable, Inc., which are allocated to the Venture,
continue to increase at historical rates. This situation has led to
reductions in operating income before depreciation and amortization as a
percent of revenue ("Operating Margin"). Such reductions in Operating Margins
may continue in the near term as the Venture and Jones Intercable, Inc. incur
cost increases due to, among other things, increases in programming fees,
compliance costs associated with reregulation and competition, that exceed
increases in revenue. Jones Intercable, Inc. will attempt to mitigate a
portion of these reductions through (a) new service offerings, (b) product re-
marketing and re-packaging and (c) marketing efforts targeted at non-
subscribers.
Interest expense increased $611,733, or approximately 27 percent, from
$2,250,106 in 1993 to $2,861,839 in 1994 due to higher effective interest
rates and higher outstanding balances on interest bearing obligations. Net
loss increased $654,641, or approximately 8 percent, from $8,245,251 in 1993
to $8,899,892 in 1994. This loss is due to the factors discussed above.
1993 Compared to 1992
Revenues of the Venture increased $709,485, or approximately 5 percent,
from $14,486,583 in 1992 to $15,196,068 in 1993. An increase in the basic
subscriber base accounted for approximately 64 percent of the increase in
revenues. Basic subscribers increased 2,232, or approximately 6 percent, from
35,194 at December 31, 1992 to 37,426 at December 31, 1993. Basic service
rate adjustments accounted for approximately 14 percent of the increase in
revenues. The increase in revenues would have been greater but for the
reduction in basic rates due to new basic rate regulations issued by the FCC
in April 1993 with which the Venture complied effective September 1, 1993. No
other individual factor was significant to the increase in revenues.
Operating, general and administrative expense increased $540,008, or
approximately 7 percent, from $7,569,387 in 1992 to $8,109,395 in 1993.
Operating, general and administrative expense represented 52 percent of
revenue in 1992 and 53 percent in 1993. Increases in programming expenses,
personnel related expense and system plant related expense were primarily
responsible for the increases in operating, general and administrative
expense. No other individual factor contributed significantly to the
increase. Management and supervision fees and allocated overhead from the
General Partners increased $127,100, or approximately 7 percent, from
$1,891,907 in 1992 to $2,019,007 in 1993 due to the increase in revenues, upon
which such fees and allocations are based, and an increase in allocated
expenses from Jones Intercable, Inc.
Depreciation and amortization expense increased $376,735, or
approximately 4 percent, from $10,507,110 in 1992 to $10,883,845 in 1993.
This increase was due to capital additions during 1992 and 1993.
Operating loss increased $334,358, or approximately 6 percent, from
$5,481,821 in 1992 to $5,816,179 in 1993. This increase was due to the
increases in operating, general and administrative expenses, management and
supervision fees and allocated overhead from the General Partners and
depreciation and amortization expenses exceeding the increase in revenues.
Operating income before depreciation and amortization increased $42,377,
or approximately 1 percent, from $5,025,289 in 1992 to $5,067,666 in 1993.
This increase was due to the increase in revenues exceeding the increases in
operating, general and administrative expense and management and supervision
fees and allocated overhead from the General Partners.
Interest expense decreased $372,893, or approximately 14 percent, from
$2,622,999 in 1992 to $2,250,106 in 1993 due to lower effective interest rates
and lower outstanding balances on interest bearing obligations. Other expense
increased $63,169, or approximately 55 percent, from $115,797 in 1992 to
$178,966 in 1993. Such expense primarily represents allocated depreciation
from related entities that provide advertising sales, warehouse and converter
repair services to the Venture. Net loss increased $24,634, or less than 1
percent, from $8,220,617 in 1992 to $8,245,251 in 1993. Such losses are due
to the factors discussed above.
13
14
Financial Condition
During 1994, the Venture expended approximately $3,588,000 on capital
expenditures. Approximately 37 percent of the expenditures related to
construction of service drops to subscriber homes. Approximately 37 percent
of the expenditures related to plant extensions. Approximately 12 percent of
the expenditures related to system rebuilds and upgrades. The remainder of the
expenditures was used for various enhancements in the Aurora System. Funding
for these expenditures was provided by cash on hand, cash generated from
operations, advances from the General Partners and borrowings from its credit
facility. Budgeted capital expenditures for 1995 are approximately
$3,255,000. Approximately 51 percent of the expenditures are for plant
extensions. Approximately 29 percent of the expenditures are for construction
of service drops to subscriber homes. Approximately 12 percent of the
anticipated capital expenditures are for system rebuilds and upgrades. The
remainder are for various enhancements in the Aurora System. Funding for the
expenditures is expected to be provided by cash generated from operations and,
if available, borrowings under the Venture's credit facility, as discussed
below.
On December 5, 1991, Jones Intercable, Inc. ("Intercable") made an equity
investment in the Venture in the amount of $2,872,000 and a loan of $1,800,000
to the Venture. On that date, IDS Management Corporation also made an equity
investment of $2,872,000 in the Venture and a loan to the Venture in the
amount of $1,800,000. A portion of the $1,800,000 loan from IDS Management
Corporation was repaid in November 1994. See discussion below. The loans
from Intercable and IDS Management Corporation are subordinate to the
Venture's new revolving credit and term loan. These loans matured in the
fourth quarter of 1994. IDS Management Corporation extended its loan until
December 5, 1995 and, although Intercable has not formally extended its loan,
it has not demanded repayment. In the first quarter of 1994, Intercable agreed
to subordinate to all other Venture debt the $1,406,647 advance to the Venture
outstanding at March 30, 1994 and IDS Management Corporation made an
additional loan of $1,000,000 to the Venture to fund principal repayments due
on the Venture's then-outstanding term loan. In the second quarter of 1994,
Intercable made a loan of $1,000,000 to the Venture to fund principal
repayments due on the Venture's then-outstanding term loan. This loan was
repaid with interest in November 1994. The interest rates on the respective
loans, which will vary from time to time, with respect to IDS Management
Corporation's loan, are at its cost of borrowing, and, with respect to
Intercable's loan, are at its weighted average cost of borrowing. It is
anticipated that the remaining loans will be repaid over time with borrowings
from the Venture's new revolving credit and term loan, as discussed below. If
the December 5, 1991 loans are not repaid, Intercable and IDS Management
Corporation will have the right, among other rights, to convert these loans to
equity in the Venture.
In November 1994, the Venture entered into a new revolving credit and
term loan agreement with a commercial bank. The new credit facility has a
maximum amount available of $40,000,000 through March 31, 1995, at which time
the maximum amount available will increase to $45,000,000. At December 31,
1994, $38,300,000 was outstanding under this agreement. Borrowings from this
new credit facility were used to repay the balance of the Venture's previous
term loan of $36,000,000, to repay to Intercable the $1,000,000 advanced by
Intercable to fund the Venture's second quarter debt repayment plus interest,
to repay to IDS Management Corporation $880,000 of principal plus interest on
the $1,800,000 loan from IDS Management Corporation dated December 5, 1991 and
to pay certain fees incurred in obtaining the new credit facility. The
revolving credit period expires December 31, 1996, at which time the then-
outstanding balance converts to a term loan payable in 28 consecutive
quarterly installments. Interest on the new credit facility is at the
Venture's option of the Base rate plus .75 percent, LIBOR plus 1.75 percent or
the CD rate plus 1.875 percent. The Venture anticipates repaying the
remaining notes outstanding to related parties with borrowings from this new
credit facility. As borrowings become available, subject to leverage
covenants, the related parties' notes will be repaid including accrued
interest in the following order: first, to IDS Management Corporation the
remaining $920,000 of the $1,800,000 note dated December 5, 1991; second, to
Intercable the $1,800,000 note dated December 5, 1991; third, to IDS
Management Corporation the $1,000,000 note dated March 30, 1994; and fourth,
to Intercable the $1,406,647 outstanding advance.
As a result of their equity contributions to the Venture, IDS Management
Corporation and Intercable each have an approximate 5 percent equity interest
in the Venture, Growth Partners II has a 66 percent interest and the
Partnership has a 24 percent interest. If any portion of the December 5, 1991
loans are converted to equity, the ownership percentages will be adjusted
accordingly.
14
15
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates.
The Venture has filed a cost-of-service showing for its Aurora System and
thus anticipates no further reductions in rates. The cost-of-service showing
has not yet received final approval from franchising authorities, however, and
there can be no assurance that the Venture's cost-of-service showing will
prevent further rate reductions until such final approval is received. See
Item 1 for further discussion of the provisions of the 1992 Cable Act and the
FCC regulations promulgated thereunder.
15
16
Item 8. Financial Statements
IDS/JONES GROWTH PARTNERS 89-B, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
INDEX
Page
-------------------
89-B Venture
Report of Independent Public Accountants 17 25
Balance Sheets 18 26
Statements of Operations 19 28
Statements of Partners' Capital (Deficit) 20 29
Statements of Cash Flows 21 30
Notes to Financial Statements 22 31
16
17
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, 1994 and 1993,
and the related statements of operations, partners' capital (deficit) and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the General Partners'
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, 1994 and 1993, and the results of its operations
and its cash flows for each of the three years in the period ended December
31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
17
18
IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
BALANCE SHEETS
December 31,
----------------------------
ASSETS 1994 1993
------ ---- ----
INVESTMENT IN CABLE TELEVISION JOINT VENTURE $ 888,039 $ 3,059,612
============ ===========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
LIABILITIES:
Accounts payable - affiliate $ 102,393 $ 102,393
------------ -----------
Total liabilities 102,393 102,393
------------ ----------
PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 500 500
Accumulated deficit (131,376) (109,660)
------------ -----------
(130,876) (109,160)
------------ -----------
Limited Partners-
Contributed capital (63,383 units
outstanding at December 31, 1994
and 1993) 12,623,901 12,623,901
Accumulated deficit (11,707,379) (9,557,522)
----------- ----------
916,522 3,066,379
------------ ----------
Total liabilities and partners' capital (deficit)
$ 888,039 $ 3,059,612
============ ==========
The accompanying notes to financial statements
are an integral part of these balance sheets.
18
19
IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
-----------------------------------------
1994 1993 1992
---- ---- ----
EQUITY IN NET LOSS OF CABLE TELEVISION
JOINT VENTURE $(2,171,573) $(2,011,841) $(2,005,831)
----------- ----------- -----------
NET LOSS $(2,171,573) $(2,011,841) $(2,005,831)
=========== =========== ===========
ALLOCATION OF NET LOSS:
General Partners $ (21,716) $ (20,118) $ (20,058)
============ ============ ============
Limited Partners $(2,149,857) $(1,991,723) $(1,985,773)
============ =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (33.92) $ (31.42) $ (31.33)
============= ============ ===========
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.
19
20
IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31,
---------------------------------
1994 1993 1992
---------------- ---- ---- ----
GENERAL PARTNERS:
Jones Cable Corporation
Balance, beginning of year
$ (54,580) $ (44,521) $ (34,492)
Net loss for year (10,858) (10,059) (10,029)
Balance, end of year $ (65,438) $ (54,580) $ (44,521)
IDS Cable Corporation
Balance, beginning of year
$ (54,580) $ (44,521) $ (34,492)
Net loss for year (10,858) (10,059) (10,029)
Balance, end of year $ (65,438) $ (54,580) $ (44,521)
Total
Balance, beginning of year
$ (109,160) $ (89,042) $ (68,984)
Net loss for year (21,716) (20,118) (20,058)
Balance, end of year $ (130,876) $ (109,160) $ (89,042)
LIMITED PARTNERS:
Balance, beginning of year $ 3,066,379 $ 5,160,495 $ 7,146,268
Less-Syndication costs - (102,393) --
Net loss for year (2,149,857) (1,991,723) (1,985,773)
---------- ---------- ----------
Balance, end of year $ 916,522 $ 3,066,379 $ 5,160,495
============ =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
20
21
IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
------------------------------------------------------
1994 1993 1992
------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$(2,171,573) $(2,011,841) $(2,005,831)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Equity in net loss of
Cable Television Joint Venture
2,171,573 2,011,841 2,005,831
Increase in advances from affiliates
-- 102,393 --
------------ ----------- -----------
Net cash provided by operating activities
-- 102,393 --
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Syndication costs -- (102,393) --
----------- ----------- -----------
Net cash used in financing activities
-- (102,393) --
------------ ----------- -----------
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.
21
22
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. Initial
Venture capitalization was accomplished through contributions by Growth
Partners II of $15,992,000 and the Partnership of $14,008,000. On September
30, 1991, Growth Partners II's offering closed with limited partner
subscriptions totalling $43,585,750, of which $37,592,709 was contributed to
the Venture.
In the fourth quarter of 1991, due to the necessity for additional
funding for the Venture, Intercable made an equity investment in the Venture
in the amount of $2,872,000 and a loan of $1,800,000 to the Venture. IDS
Management Corporation also made an equity investment of $2,872,000 in the
Venture and a loan to the Venture in the amount of $1,800,000. A portion of
the loan from IDS Management Corporation was repaid in November 1994. As a
result of their equity contributions to the Venture, IDS Management
Corporation and Intercable each have an approximate 5 percent equity interest
in the Venture, Growth Partners II has an approximate 66 percent interest and
the Partnership has an approximate 24 percent interest.
22
23
(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.
Investment in Cable Television Joint Venture
The investment in the Venture is accounted for under the equity method.
The Venture incurred losses of $8,899,892, $8,245,251 and $8,220,617 in 1994,
1993 and 1992, respectively, of which $2,171,573, $2,011,841 and $2,005,831,
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 36.
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
Management Fees, Supervision Fees, Distribution Ratios and Reimbursements
The Managing General Partner 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 to the Managing General Partner by the
Venture during the years ended December 31, 1994, 1993 and 1992 (reflecting
the Partnership's approximate 24 percent interest in the Venture) were
$187,739, $185,392 and $176,736, respectively.
The Supervising General Partner participates in certain management
decisions of the Partnership and receives a fee for its 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 to the
Supervising General Partner by the Venture during the years ended December 31,
1994, 1993 and 1992 (reflecting the Partnership's approximate 24 percent
interest in the Venture) were $18,774, $18,539 and $17,674, 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, 1994, 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 related facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services
to the Partnership. Allocations of personnel costs are based on actual time
spent by employees of Intercable with respect to each partnership managed.
Remaining overhead costs are allocated primarily based on revenues and/or the
cost of assets managed for the Partnership. Effective December 1, 1993, the
allocation method was changed to be based only on revenue, which the General
Partners believe provides a more accurate method of allocation. 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 the Managing General Partner by the
Partnership for allocated overhead and administrative expenses during the
years ended December 31, 1994, 1993 and 1992 (reflecting the Partnership's
approximate 24 percent interest in the Venture) were $286,408, $288,707 and
$267,215, respectively. The Supervising General Partner may also be reimbursed
for certain expenses incurred on behalf of the Partnership. There were no
reimbursements made to the Supervising General Partner for allocated overhead
and administrative expenses during the years ended December 31, 1994, 1993 and
1992.
23
24
(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. There are no significant differences between
taxable income (loss) and the net income (loss) reported in the statements of
operations.
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.
24
25
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, 1994 and
1993, and the related statements of operations, partners' capital and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the General Partners'
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, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
25
26
IDS/JONES JOINT VENTURE PARTNERS
(A General Partnership)
BALANCE SHEETS
December 31,
----------------------
ASSETS 1994 1993
------ ---- ----
CASH $ 57,284 $ 81,997
TRADE RECEIVABLES, less allowance for
doubtful receivables of $50,993 and $34,993
at December 31, 1994 and 1993, respectively
403,428 365,509
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost
34,508,868 30,921,229
Less- accumulated depreciation (14,180,482) (10,370,393)
----------- -----------
20,328,386 20,550,836
Franchise costs, net of accumulated amortization
of $31,231,579 and $25,699,750 at December 31, 1994
and 1993, respectively 27,335,542 32,867,371
Subscriber lists, net of accumulated amortization
of $4,951,136 and $3,884,274 at December 31, 1994
and 1993, respectively 2,668,367 3,735,229
Costs in excess of interests in net assets
purchased, net of accumulated amortization
of $859,836 and $672,276 at December 31, 1994
and 1993, respectively 6,651,535 6,839,095
---------- ------------
Total investment in cable television
properties 56,983,830 63,992,531
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES
307,504 155,933
----------- ------------
Total assets $57,752,046 $ 64,595,970
=========== ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
26
27
IDS/JONES JOINT VENTURE PARTNERS
(A General Partnership)
BALANCE SHEETS
December 31,
-----------------------------
LIABILITIES AND PARTNERS' CAPITAL 1994 1993
--------------------------------- ---- ----
LIABILITIES:
Debt $ 43,566,064 $ 41,604,580
Accounts payable-
Trade - 9,570
Jones Intercable, Inc. 933,949 1,056,828
Accrued liabilities 1,195,893 980,221
Subscriber prepayments 54,863 43,602
------------- -------------
Total liabilities 45,750,769 43,694,801
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL:
Contributed capital 57,344,709 57,344,709
Accumulated deficit (45,343,432) (36,443,540)
----------- -----------
12,001,277 20,901,169
----------- -----------
Total liabilities and partners' capital
$ 57,752,046 $ 64,595,970
=========== ===========
The accompanying notes to financial statements
are an integral part of these balance sheets.
27
28
IDS/JONES JOINT VENTURE PARTNERS
(A General Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
---------------------------------------
1994 1993 1992
---- ---- ----
REVENUES $15,388,489 $15,196,068 $14,486,583
COSTS AND EXPENSES:
Operating, general and
administrative 8,655,004 8,109,395 7,569,387
Management and supervision
fees and allocated
overhead from affiliates 2,020,170 2,019,007 1,891,907
Depreciation and amortization 10,596,340 10,883,845 10,507,110
---------- ---------- ----------
OPERATING LOSS (5,883,025) (5,816,179) (5,481,821)
---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense (2,861,839) (2,250,106) (2,622,999)
Other expense (155,028) (178,966) (115,797)
Total other expense (3,016,867) (2,429,072) (2,738,796)
---------- ---------- ----------
NET LOSS
$(8,899,892) $(8,245,251) $(8,220,617)
=========== =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
28
29
IDS/JONES JOINT VENTURE PARTNERS
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL
Year Ended December 31,
-------------------------------------------
1994 1993 1992
---- ---- ----
IDS/JONES GROWTH PARTNERS 89-B:
Balance, beginning of year $ 3,059,612 $ 5,071,453 $ 7,077,284
Net loss for year (2,171,573) (2,011,841) (2,005,831)
----------- ----------- ------------
Balance, end of year $ 888,039 $ 3,059,612 $ 5,071,453
=========== =========== ============
DS/JONES GROWTH PARTNERS II:
Balance, beginning of year $13,798,921 $19,207,805 $ 24,600,529
Net loss for year (5,838,329) (5,408,884) (5,392,724)
----------- ----------- ------------
Balance, end of year $ 7,960,592 $13,798,921 $ 19,207,805
=========== =========== ============
JONES INTERCABLE, INC.:
Balance, beginning of year $ 2,021,318 $ 2,433,581 $ 2,844,612
Net loss for year (444,995) (412,263) (411,031)
----------- ----------- ------------
Balance, end of year $ 1,576,323 $ 2,021,318 $ 2,433,581
=========== =========== ============
IDS MANAGEMENT CORPORATION:
Balance, beginning of year $ 2,021,318 $ 2,433,581 $ 2,844,612
Net loss for year (444,995) (412,263) (411,031)
----------- ----------- ------------
Balance, end of year $ 1,576,323 $ 2,021,318 $ 2,433,581
=========== =========== ============
Total
Balance, beginning of year $20,901,169 $29,146,420 $ 37,367,037
Net loss for year (8,899,892) (8,245,251) (8,220,617)
----------- ----------- ------------
Balance, end of year $12,001,277 $20,901,169 $ 29,146,420
=========== =========== ============
The accompanying notes to financial statements
are an integral part of these statements.
29
30
IDS/JONES JOINT VENTURE PARTNERS
(A General Partnership)
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------------------------
1994 1993 1992
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(8,899,892) $(8,245,251) $(8,220,617)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization
10,596,340 10,883,845 10,507,110
Amortization of interest rate
protection contract - - 29,997
Decrease (increase) in trade receivables (37,919) 15,099 (29,549)
Decrease (increase) in deposits, prepaid
expenses and deferred charges
(151,571) 11,335 53,179
Increase (decrease) in trade
accounts payable, accrued
liabilities and subscriber
prepayments 217,363 408,138 (229,705)
Increase (decrease) in advances
from Jones Intercable, Inc.
(122,879) 710,989 (140,813)
------------ ----------- -----------
Net cash provided by operating activities
1,601,442 3,784,155 1,969,602
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment
(3,587,639) (2,997,575) (2,489,949)
------------ ----------- -----------
Net cash used in investing activities
(3,587,639) (2,997,575) (2,489,949)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 40,900,085 - 2,129,607
Repayment of debt (38,938,601) (2,073,963) (276,911)
------------ ----------- -----------
Net cash provided by (used in) financing
activities
1,961,484 (2,073,963) 1,852,696
------------ ----------- -----------
Increase (decrease) in cash (24,713) (1,287,383) 1,332,349
Cash, beginning of year 81,997 1,369,380 37,031
------------ ----------- -----------
Cash, end of year $ 57,284 $ 81,997 $ 1,369,380
============ =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid
$ 2,516,358 $ 2,069,821 $ 2,664,762
============ =========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
30
31
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.
In the fourth quarter of 1991, due to the necessity for additional funding
for the Venture, Jones Intercable, Inc. ("Intercable") made an equity investment
in the Venture in the amount of $2,872,000 and a loan of $1,800,000 to the
Venture. IDS Management Corporation also made an equity investment of
$2,872,000 in the Venture and a loan to the Venture in the amount of $1,800,000.
A portion of the loan from IDS Management Corporation was repaid in November
1994. See Note 5. Such equity investments and loans were used to repay the
balance outstanding on the Venture's bridge facility, pay acquisition fees of
$3,244,000 and the remainder of such funds were used for Venture working capital
needs. The loans from Intercable and IDS Management Corporation are subordinate
to the Venture's new revolving credit and term loan agreement. These loans
matured in the fourth quarter of 1994. IDS Management Corporation extended its
loan until December 5, 1995 and, although Intercable has not formally extended
its loan, it has not demanded repayment. In the first quarter of 1994,
Intercable agreed to subordinate to all other Venture debt the $1,406,647
advance to the Venture outstanding at March 30, 1994 and IDS Management
Corporation made an additional loan of $1,000,000 to the Venture to fund
principal repayments due on the Venture's then-outstanding term loan. This
loan was repaid with interest in November 1994. In the second quarter of 1994,
Intercable made a loan of $1,000,000 to the Venture to fund principal
repayments due 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 loan, are at its cost of borrowing, and, with respect
to Intercable's loan, are at its weighted average cost of borrowing. It is
anticipated that the remaining loans will be repaid over time with borrowings
from the Venture's new revolving credit and term loan, as discussed below. If
the December 5, 1991 loans are not repaid, Intercable and IDS Management
Corporation will have the right, among other rights, to convert these loans to
equity in the Venture.
As a result of their equity contributions to the Venture, IDS Management
Corporation and Intercable each have an approximate 5 percent equity interest
in the Venture, IDS/Jones II has an approximate 66 percent interest and
IDS/Jones 89-B has an approximate 24 percent interest. If the December 5,
1991 loans are 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.
31
32
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.
(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.
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 will be 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 - 15 years
Buildings 10 - 20 years
Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and
repairs are charged to expense as incurred.
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 6 years
Subscriber lists 3 years
Costs in excess of interests in
net assets purchased 36 years
Revenue Recognition
Subscriber prepayments are initially deferred and recognized as revenue
when earned.
(3) TRANSACTIONS WITH JONES INTERCABLE, INC. 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, 1994, 1993,
1992 were $769,424, $759,803 and $724,329, respectively.
32
33
The Supervising General Partners participate in certain management decisions
of the Venture and receive 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, 1994, 1993,
1992 were $76,942, $75,980 and $72,433, 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 related facilities costs. Such personnel provide engineering,
marketing, administrative, accounting, legal and investor relations services
to the Venture. Allocations of personnel costs are based on actual time spent
by employees of Intercable with respect to each partnership managed.
Remaining overhead costs are allocated primarily based on revenues and/or the
costs of partnership assets managed. Effective December 1, 1993, the
allocation method was changed to be based only on revenue, which the General
Partners believe provides a more accurate method of allocation. Systems owned
by Intercable and all other systems owned by partnerships for which Intercable
or affiliates of 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 year ended December 31, 1994, 1993, 1992 were $1,173,804, $1,183,224
and $1,095,145, respectively. The Supervising General Partners also are
entitled to reimbursement 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, 1994, 1993 and 1992.
The Venture was charged interest by Intercable at an average interest
rate of 10 percent on the amounts due Intercable and on the subordinated
loans from Intercable, which approximates Intercable's weighted average cost of
borrowing. Total interest charged to the Venture by Intercable during the
years ended December 31, 1994, 1993 and 1992 was $386,257, $192,746 and
$230,032, respectively.
The Venture was charged interest on the subordinated loans from IDS
Management Corporation at an average interest rate of 5.69 percent, which
approximated IDS Management Corporation's cost of borrowing. Total interest
charged to the Venture by IDS Management Corporation during the years ended
December 31, 1994, 1993 and 1992 was $113,458, $65,653 and $76,112,
respectively.
Payments to Affiliates for Programming Services
The Venture receives programming from Product Information Network,
Superaudio, The Mind Extension University and Jones Computer Network,
affiliates of Intercable. Payments to Superaudio totaled $23,558, $22,627
and $22,066, respectively, during the years ended December 31, 1994, 1993 and
1992. Payments to The Mind Extension University totaled $21,347, $13,168 and
$12,643, respectively, during the years ended December 31, 1994, 1993 and
1992. Payments to Jones Computer Network, which initiated service in 1994,
totaled $12,421 in 1994. The Venture receives a commission from Product
Information Network based on a percentage of advertising revenue and number of
subscribers. Product Information Network, which initiated service in 1994,
paid commissions to the Venture totalling $11,442 in 1994.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and 1993,
consisted of the following:
1994 1993
-------------- --------------
Cable distribution systems $33,355,717 $29,996,667
Equipment and tools 560,606 569,391
Office furniture and equipment 180,163 184,056
Vehicles 270,382 171,115
---------- ----------
34,366,868 30,921,229
Less-accumulated depreciation
(14,180,482) (10,370,393)
----------- -----------
$ 20,186,386 $ 20,550,836
=========== ===========
33
34
(5) DEBT
Debt consists of the following:
December 31,
--------------------------
1994 1993
----------- -----------
Lending institutions-
Revolving credit agreement $38,300,000 $38,000,000
Affiliated entities -
Subordinated notes payable 5,126,647 3,600,000
Capital lease obligations 139,417 4,580
---------- ----------
$43,566,064 $41,604,580
========== ==========
On December 5, 1991, Intercable made an equity investment in the Venture
in the amount of $2,872,000 and a loan of $1,800,000 to the Venture. On that
date, IDS Management Corporation also made an equity investment of $2,872,000
in the Venture and a loan to the Venture in the amount of $1,800,000. A
portion of the $1,800,000 loan from IDS Management Corporation was repaid in
November 1994. See discussion below. The loans from Intercable and IDS
Management Corporation are subordinate to the Venture's new revolving credit and
term loan. These loans matured in the fourth quarter of 1994. IDS Management
Corporation extended its loan until December 5, 1995 and although Intercable has
not formally extended its loan, it has not demanded repayment. In the first
quarter of 1994, Intercable agreed to subordinate to all other Venture debt the
$1,406,647 advance to the Venture outstanding at March 30, 1994 and IDS
Management Corporation made an additional loan of $1,000,000 to the Venture to
fund principal repayments due on the Venture's then-outstanding term loan. This
loan was repaid with interest in November 1994. In the second quarter of 1994,
Intercable made a loan of $1,000,000 to the Venture to fund principal repayments
due 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 loan, are at its cost of borrowing, and, with respect
to Intercable's loan, are at its weighted average cost of borrowing. It is
anticipated that the remaining loans will be repaid over time with borrowings
from the Venture's new revolving credit and term loan, as discussed below. If
the December 5, 1991 loans are not repaid, Intercable and IDS Management
Corporation will have the right, among other rights, to convert these loans to
equity in the Venture.
In November 1994, the Venture entered into a new revolving credit and
term loan agreement with a commercial bank. The new credit facility has a
maximum amount available of $40,000,000 through March 31, 1995, at which time
the maximum amount available will increase to $45,000,000. At December 31,
1994, $38,300,000 was outstanding under this agreement. Borrowings from this
new credit facility were used to repay the balance of the Venture's previous
term loan of $36,000,000, to repay to Intercable the $1,000,000 advanced by
Intercable to fund the Venture's second quarter debt repayment plus interest,
to repay to IDS Management Corporation $880,000 of principal plus interest on
the $1,800,000 loan from IDS Management Corporation dated December 5, 1991 and
to pay certain fees incurred in obtaining the new credit facility. The
revolving credit period expires December 31, 1996, at which time the then-
outstanding balance converts to a term loan payable in 28 consecutive
quarterly installments. Interest on the new credit facility is at the
Venture's option of the Base rate plus .75 percent, LIBOR plus 1.75 percent or
the CD rate plus 1.875 percent. The Venture anticipates repaying the
remaining notes outstanding to related parties with borrowings from this new
credit facility. As borrowings become available, subject to leverage
covenants, the related parties' notes will be repaid including accrued
interest in the following order: first, to IDS Management Corporation the
remaining $920,000 of the $1,800,000 note dated December 5, 1991; second, to
Intercable the $1,800,000 note dated December 5, 1991; third, to IDS
Management Corporation the $1,000,000 note dated March 30, 1994; and fourth,
to Intercable the $1,406,647 outstanding advance.
On December 7, 1991, the Venture entered into a rate cap agreement
covering outstanding debt obligations of $20,000,000. The Venture paid a fee
of $37,000. The agreement protected the Venture from LIBOR interests rates
that exceeded 7 percent and expired in December 1993. The fee was 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, 1999 and thereafter, respectively, are: $5,168,472,
$41,825, $1,956,825, $3,843,942, $4,596,000 and $27,959,000.
34
35
(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. There are no significant differences between taxable loss
and the net loss reported in the statements of operations.
The Venture's tax returns, the qualification of the Venture as such for
tax purposes, and the amount of distributable Venture income or loss are
subject to examination by Federal and state taxing authorities. If such
examinations result in changes with respect to the Venture's qualification as
such, 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 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.
(7) COMMITMENTS AND CONTINGENCIES
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the Federal Communications Commission (the "FCC") adopted regulations
governing rates for basic and non-basic services. These regulations became
effective on September 1, 1993. Such regulations caused reductions in rates
for certain regulated services. On February 22, 1994, the FCC adopted several
additional rate orders including an order which revised its earlier-announced
regulatory scheme with respect to rates. The Venture has filed a cost-of-
service showing in its Aurora System and therefore anticipates no further
reductions in rates. The cost-of-service showing has not received final
approval from franchising authorities, however, and there can be no assurance
that the Venture's cost-of-service showing will prevent further rate
reductions until such final approval is received.
The Venture rents office and other facilities under various long-term
lease arrangements. Rent paid under such lease arrangements totalled $60,313,
$106,840 and $86,147, respectively, for the years ended December 31, 1994,
1993 and 1992. Minimum commitments under leases for the five years in the
period ending December 31, 1999, and thereafter are as follows:
1995 $18,830
1996 16,730
1997 16,730
1998 16,730
1999 16,730
Thereafter 1,394
-------
$87,144
======
35
36
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
Year Ended December 31,
------------------------------------------------------
1994 1993 1992
------------ ------------ -------------
Maintenance and repairs $ 133,849 $ 115,863 $ 82,923
=========== =========== ============
Taxes, other than income and payroll taxes
$ 11,949 $ 25,485 $ 37,954
============ =========== ============
Advertising $ 423,866 $ 346,457 $ 357,594
============ =========== ============
Depreciation of property, plant and equipment
$ 3,810,089 $3,467,318 $ 3,091,691
========= ========= =========
Amortization of intangible assets
$6,786,251 $7,416,527 $7,415,419
========= ========= =========
36
37
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.
Positions with the Managing
Name Age General Partner
---- --- ---------------------------
Glenn R. Jones 65 Chairman of the Board and Chief
Executive Officer
James B. O'Brien 45 President
Kevin P. Coyle 43 Vice President of Finance
Elizabeth M. Steele 43 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. Glenn R. 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 the subsidiaries of Intercable and of
certain other affiliates of Intercable. Mr. Jones has been involved in the
cable television business in various capacities since 1961, is a past and
present member of the Board of Directors of the National Cable Television
Association, and is a former member of its Executive Committee. Mr. Jones is a
past director and member of the Executive Committee of C-Span. 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 Chairman's Award from the Investment Partnership Association, which is an
association of sponsors of public syndications; the cable television industry's
Public Affairs Association President's Award in 1990, the Donald G. McGannon
award for the advancement of minorities and women in cable; 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; and the Women in
Cable Accolade in 1990 in recognition of support of this organization. Mr.
Jones is also a founding member of the James Madison Council of the Library of
Congress and is on the Board of Governors of the American Society of Training
and Development.
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. Mr. O'Brien is a board member of Cable Labs,
Inc., the research arm of the cable television industry. He also serves as a
director of the Cable Television Administration and Marketing Association and
as a director of the Walter Kaitz Foundation, a 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.
37
38
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 Intercable, Ms. Steele was an
associate and then a partner at the Denver law firm of Davis, Graham & Stubbs,
which serves as counsel to Intercable.
Certain information concerning directors and executive officers of the
Supervising General Partner is set forth below:
Positions with the
Name Age Supervising General Partner
---- --- ---------------------------
Janis E. Miller 43 President and Director
Morris Goodwin, 43 Vice President and Treasurer
Jr.
Lori J. Larson 36 Vice President and Director
Ronald W. Powell 50 Vice President
Juanita M. Costa 46 Vice President and Director
Bradley C. Nelson 30 Vice President
Louis C. Fornetti 45 Director
Ms. Janis E. Miller has served as Vice President of Variable Assets of
American Express Financial Corporation since December 1993. From June 1990 to
November 1993, Ms. Miller held the position of Vice President of Mutual
Funds/Limited Partnership Product Development and Marketing with American
Express Financial Corporation.
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.
Ms. Lori J. Larson has been employed by American Express Financial
Corporation since 1981 and currently holds the title of Vice 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. 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 IDS law department since 1975.
Ms. Juanita M. Costa has served as Director of Financial Education
Services ("FES") for American Express Financial Corporation since January
1994. She is responsible for marketing FES programs to corporate clients.
Ms. Costa has served as Vice President of Investment Services with IDS Trust
Company since October 1991. From April 1987 to mid-1991, Ms. Costa was Vice
President-Limited Partnership Operations. From June 1984 to April 1987, she
was a Vice President of L.F. Rothschild and, from January 1980 to June 1984,
she was an Assistant Vice President at Prudential Bache Securities.
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. Louis C. Fornetti has been employed with American Express Financial
Corporation since 1985 as Corporate Controller. He has been on the board of
directors of American Express Financial Corporation since 1988 and assumed the
role of Chief Financial Officer and Senior Vice President in 1993.
38
39
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
No person or entity owns 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.
The Managing General Partner charges a management fee, and Intercable,
the parent of the Managing General Partner, is reimbursed for certain
allocated overhead and administrative expenses. These expenses consist
primarily of 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. Allocations of personnel costs are based primarily on
actual time spent by employees with respect to each partnership managed.
Remaining overhead costs are allocated based on revenues and/or the costs of
assets managed. 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 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.
The Aurora System receives stereo audio programming from Superaudio, a
joint venture owned 50% by an affiliate of the Managing General Partner and
50% by an unaffiliated party, educational video programming from Mind
Extension University, Inc., an affiliate of the Managing General Partner, and
computer video programming from Jones Computer Network, Ltd., an affiliate of
the Managing General Partner, for fees based upon the number of subscribers
receiving the programming.
Product Information Network ("PIN"), an affiliate of the Managing General
Partner, provides advertising time for third parties on the Aurora System. In
consideration, the revenues generated from the third parties are
39
40
shared two-thirds and one-third between PIN and the Venture. During the year
ended December 31, 1994, the Venture received revenues from PIN of $11,442.
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:
At December 31,
------------------------------------
1994 1993 1992
---- ---- ----
Management fees $769,424 $759,803 $724,329
Supervision fees 76,942 75,980 72,433
Allocation of expenses 1,173,804 1,183,224 1,095,145
Interest expense 386,257 258,399 306,144
Amount of notes and advances 933,949 1,056,828 345,839
outstanding
Highest amount of notes and 1,040,406 1,056,828 462,447
advances outstanding
Programming fees:
Superaudio 23,558 22,627 22,066
Mind Extension 21,347 13,168 12,643
University
Jones Computer Network 12,421 -0- -0-
40
41
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 (IDS/Jones Joint Venture Partners).
(1)
10.1.2 Copy of franchise and related documents granting a
cable television system franchise for Kane County,
Illinois (IDS/Jones Joint Venture Partners). (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 (IDS/Jones Joint Venture Partners). (1)
10.1.8 Copy of franchise and related documents granting a
cable television system franchise for the Village of
Montgomery, Illinois (IDS/Jones Joint Venture
Partners). (1)
10.1.9 Copy of franchise and related documents granting a
cable television system franchise for the Village of
North Aurora, Illinois (IDS/Jones Joint Venture
Partners). (1)
Copy of franchise and related documents granting a
10.1.10 cable television system franchise for the Village of
Oswego, Illinois (IDS/Jones Joint Venture Partners).
(1)
Copy of franchise and related documents granting a
10.1.11 cable television system franchise for the City of
Plano, Illinois (IDS/Jones Joint Venture Partners).
(1)
Copy of franchise and related documents granting a
10.1.12 cable television system franchise for the City of
Sandwich, Illinois (IDS/Jones Joint Venture
Partners). (1)
Copy of franchise and related documents granting a
10.1.12 cable television system franchise for the Village of
Yorkville, Illinois (IDS/Jones Joint Venture
Partners). (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.
41
42
10.2.2 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 II (Commission
File No. 0-18133) for fiscal year ended December 31,
1992.
(b) Reports on Form 8-K
-------------------
None.
-----
42
43
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: /s/ Glenn R. Jones
-------------------------------
Glenn R. Jones
Chairman of the Board and
Dated: March 27, 1995 Chief Executive Officer
By IDS Cable Corporation,
their Supervising General Partner
By: /s/ Janis E. Miller
--------------------------------
Janis E. Miller
Dated: March 27, 1995 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: /s/ Glenn R. Jones
---------------------------------
Glenn R. Jones
Chairman of the Board and
Chief Executive Officer
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
----------------------------------
Kevin P. Coyle
Vice President/Finance
(Principal Financial and
Dated: March 27, 1995 Accounting Officer)
43
44
OFFICERS AND DIRECTORS OF IDS CABLE CORPORATION:
By: /s/ Janis E. Miller
-------------------------------
Janis E. Miller
President and Director
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Morris Goodwin, Jr.
--------------------------------
Morris Goodwin, Jr.
Vice President and Treasurer
(Principal Financial and
Dated: March 27, 1995 Accounting Officer)
By: /s/ Lori J. Larson
---------------------------------
Lori J. Larson
Dated: March 27, 1995 Vice President and Director
By: /s/ Juanita M. Costa
---------------------------------
Juanita M. Costa
Dated: March 27, 1995 Vice President and Director
By: /s/ Louis C. Fornetti
Dated: March 27, 1995 ---------------------------------
Louis C. Fornetti, Director
44
45
EXHIBIT INDEX
Exhibit Page
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 (IDS/Jones Joint Venture Partners).
(1)
10.1.2 Copy of franchise and related documents granting a
cable television system franchise for Kane County,
Illinois (IDS/Jones Joint Venture Partners). (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 (IDS/Jones Joint Venture Partners). (1)
10.1.8 Copy of franchise and related documents granting a
cable television system franchise for the Village of
Montgomery, Illinois (IDS/Jones Joint Venture
Partners). (1)
10.1.9 Copy of franchise and related documents granting a
cable television system franchise for the Village of
North Aurora, Illinois (IDS/Jones Joint Venture
Partners). (1)
Copy of franchise and related documents granting a
10.1.10 cable television system franchise for the Village of
Oswego, Illinois (IDS/Jones Joint Venture Partners).
(1)
Copy of franchise and related documents granting a
10.1.11 cable television system franchise for the City of
Plano, Illinois (IDS/Jones Joint Venture Partners).
(1)
Copy of franchise and related documents granting a
10.1.12 cable television system franchise for the City of
Sandwich, Illinois (IDS/Jones Joint Venture
Partners). (1)
Copy of franchise and related documents granting a
10.1.12 cable television system franchise for the Village of
Yorkville, Illinois (IDS/Jones Joint Venture
Partners). (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.
46
EXHIBIT PAGE
------- ----
10.2.2 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 II (Commission
File No. 0-18133) for fiscal year ended December 31,
1992.