-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MJffFZBO076pBDXcxcgDsfzxngsNCYeWTO+1eQK1YQl8Lngw7/OUD6LDt8VA1+MW FT/gpyetmKt2Yhec3b2eaA== 0000950134-95-001161.txt : 20040504 0000950134-95-001161.hdr.sgml : 20040504 19950515160100 ACCESSION NUMBER: 0000950134-95-001161 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 DATE AS OF CHANGE: 19990831 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS JONES GROWTH PARTNERS 89-B LTD CENTRAL INDEX KEY: 0000849978 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 841060546 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17734 FILM NUMBER: 95539497 BUSINESS ADDRESS: STREET 1: 9697 E MINERAL AVE PO BOX 3309 STREET 2: C/O JONES INTERCABLE INC CITY: ENGLEWOOD STATE: CO ZIP: 80155-3309 BUSINESS PHONE: 3037923111 MAIL ADDRESS: STREET 1: C/O JONES INTERCABLE INC STREET 2: 9697 E MINERAL AVE PO BOX 3309 CITY: ENGLEWOOD STATE: CO ZIP: 80155-3309 10-Q 1 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 3/31/95 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1995. [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . --------- --------- Commission file number: 0-17734 IDS/JONES GROWTH PARTNERS 89-B, LTD. - -------------------------------------------------------------------------------- Exact name of registrant as specified in its charter Colorado #84-1060546 - -------------------------------------------------------------------------------- State of organization I.R.S. employer I.D.# 9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309 ------------------------------------------------------------------------ Address of principal executive office (303) 792-3111 ----------------------------- Registrant's telephone number Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 2 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) UNAUDITED BALANCE SHEETS
March 31, December 31, ASSETS 1995 1994 ------ ------------ ------------ INVESTMENT IN CABLE TELEVISION JOINT VENTURE $ 226,701 $ 888,039 ============= ============ 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 (137,989) (131,376) ------------- ------------ (137,489) (130,876) ------------- ------------ Limited Partners- Net contributed capital (63,383 units outstanding at March 31, 1995 and December 31, 1994) 12,623,901 12,623,901 Accumulated deficit (12,362,104) (11,707,379) ------------- ------------ 261,797 916,522 ------------- ------------ Total liabilities and partners' capital (deficit) $ 226,701 $ 888,039 ============= ============
The accompanying notes to unaudited financial statements are an integral part of these unaudited balance sheets. -2- 3 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, ------------------------------- 1995 1994 ----------- ----------- EQUITY IN NET LOSS OF CABLE TELEVISION JOINT VENTURE $ (661,338) $ (536,364) ----------- ----------- NET LOSS $ (661,338) $ (536,364) =========== =========== ALLOCATION OF NET LOSS: General Partners $ (6,613) $ (5,364) =========== =========== Limited Partners $ (654,725) $ (531,000) =========== =========== NET LOSS PER LIMITED PARTNERSHIP UNIT $ (10.33) $ (8.38) =========== =========== WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS OUTSTANDING 63,383 63,383 =========== ===========
The accompanying notes to unaudited financial statements are an integral part of these unaudited statements. -3- 4 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) UNAUDITED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, ------------------------------- 1995 1994 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (661,338) $ (536,364) Adjustments to reconcile net loss to net cash provided by operating activities: Equity in net loss of Cable Television Joint Venture 661,338 536,364 ------------ ------------ Net cash provided by operating activities - - ------------ ------------ Cash, beginning of period - - ------------ ------------ Cash, end of period $ - $ - ============ ============ SUPPLEMENTAL CASH FLOW DISCLOSURE: Interest paid $ - $ - ============ ============
The accompanying notes to unaudited financial statements are an integral part of these unaudited statements. -4- 5 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) NOTES TO UNAUDITED FINANCIAL STATEMENTS (1) This Form 10-Q is being filed in conformity with the Securities and Exchange Commission requirements for unaudited financial statements and does not contain all of the necessary footnote disclosures required for a fair presentation of the Balance Sheets and Statements of Operations and Cash Flows in conformity with generally accepted accounting principles. However, in the opinion of management, this data includes all adjustments, consisting only of normal recurring accruals, necessary to present fairly the financial position of IDS/Jones Growth Partners 89-B, Ltd. (the "Partnership") at March 31, 1995 and December 31, 1994 and its Statements of Operations and Cash Flows for the three months ended March 31, 1995 and 1994. Results of operations for this period are not necessarily indicative of results to be expected for the full year. The Partnership owns an interest in IDS/Jones Joint Venture Partners (the "Venture") through a capital contribution of $14,008,000 made in 1990. Upon final capitalization of the Venture, the Partnership owns an approximate 24 percent interest in the Venture. The Venture acquired the cable television systems serving areas in and around Aurora, Illinois on May 31, 1990. (2) Jones Cable Corporation (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 during the three month periods ended March 31, 1995 and 1994 (reflecting the Partnership's approximate 24 percent interest in the Venture) were $49,001 and $45,974, respectively. IDS Cable Corporation (the "Supervising General Partner") participates in certain management decisions of the Partnership and receives a fee for its services equal to one-half percent of the Partnership's portion of the gross revenues of the Venture, excluding revenues from the sale of cable television systems or franchises. Supervision fees paid during the three month periods ended March 31, 1995 and 1994 (reflecting the Partnership's approximate 24 percent interest in the Venture) were $4,900 and $4,597, respectively. The Venture reimburses Jones Intercable, Inc. ("JIC"), the parent of the Managing General Partner, for certain allocated overhead and administrative expenses. These expenses represent the salaries and related benefits paid for corporate personnel, rent, data processing services and other corporate facilities costs. Such personnel provide engineering, marketing, administrative, accounting, legal and investor relations services to the Venture. Allocations of personnel costs are based primarily on actual time spent by employees of JIC with respect to each partnership managed. Remaining overhead costs are allocated based on revenues of the Partnership as a percentage of total revenues of owned and managed partnerships of JIC. Systems owned by JIC and all other systems owned by partnerships for which JIC is general partner 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 JIC by the Partnership for allocated overhead and administrative expenses during the three month periods ended March 31, 1995 and 1994 (reflecting the Partnership's approximate 24 percent interest in the Venture) were $77,234 and $71,420, respectively. The Supervising General Partner may also be reimbursed for certain expenses incurred on behalf of the Venture. There were no reimbursements made to the Supervising General Partner during the three month periods ended March 31, 1995 and 1994. Management fees paid to the Managing General Partner by the Venture totaled $200,825 and $188,417, respectively, for the three months ended March 31, 1995 and 1994. Supervision fees paid to the Supervising General Partner were $20,082 and $18,842, respectively, for the three months ended March 31, 1995 and 1994. Reimbursements for overhead and administrative expenses paid to JIC totaled $316,534 and $292,706, respectively, for the three months ended March 31, 1995 and 1994. -5- 6 (3) Financial information regarding the Venture is presented below. UNAUDITED BALANCE SHEETS
March 31, 1995 December 31, 1994 -------------- ----------------- ASSETS ------ Cash and accounts receivable $ 425,577 $ 460,712 Investment in cable television properties 54,804,838 56,983,830 Other assets 428,715 307,504 ------------ ------------ Total assets $ 55,659,130 $ 57,752,046 ============ ============ LIABILITIES AND PARTNERS' CAPITAL --------------------------------- Debt $ 45,048,736 $ 43,566,064 Accounts payable and accrued liabilities 1,319,519 2,184,705 Partners' contributed capital 57,344,709 57,344,709 Accumulated deficit (48,053,834) (45,343,432) ------------ ------------ Total liabilities and partners' capital $ 55,659,130 $ 57,752,046 ============ ============
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, --------------------------------- 1995 1994 ------------ ----------- Revenues $ 4,016,495 $ 3,768,333 Operating expenses (2,345,384) (2,163,815) Management fees and allocated overhead from General Partners (537,441) (499,965) Depreciation and amortization (2,820,010) (2,701,871) ------------ ----------- Operating loss (1,686,340) (1,597,318) Interest expense (1,020,491) (556,571) Other, net (3,571) (44,324) ------------ ----------- Net loss $ (2,710,402) $(2,198,213) ============ ===========
-6- 7 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION The Partnership owns an approximate 24 percent interest in IDS/Jones Joint Venture Partners (the "Venture"). The Venture owns the cable television system serving certain areas in and around Aurora, Illinois. The Partnership's investment in this cable television joint venture accounted for under the equity method, decreased by $661,338 compared to the December 31, 1994 balance. This decrease represents the Partnership's share of losses generated by the Venture during the first three months of 1995. These losses are anticipated to continue. During the first three months of 1995, the Venture expended approximately $633,000 on capital expenditures. Approximately 42 percent of the expenditures related to construction of service drops to subscriber homes. Approximately 29 percent of the expenditures related to plant extensions. The remainder of the expenditures were used for various enhancements in the Aurora System. Funding for these expenditures was provided by borrowings from the Venture's credit facility and cash generated from operations. Anticipated capital expenditures for the remainder of 1995 are approximately $2,622,000. Approximately 62 percent of the anticipated capital expenditures are for plant extensions. Approximately 28 percent of the expenditures are for construction of service drops to subscriber homes. Funding for the expenditures is expected to be provided by cash on hand, cash generated from operations and borrowings under a renegotiated credit facility, as discussed below. On December 5, 1991, Jones Intercable, Inc. ("JIC") 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 JIC 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 JIC has not formally extended its loan, it has not demanded repayment. In the first quarter of 1994, JIC 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, JIC 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 loans, are at its cost of borrowing, and, with respect to JIC's loans, 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, JIC 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 had a maximum amount available of $40,000,000 through March 31, 1995, at which time the maximum amount available increased to $45,000,000. At March 31, 1995, $39,300,000 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 JIC the $1,000,000 advanced by JIC 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, to pay certain fees incurred in obtaining the new credit facility and to provide liquidity for capital expenditures. 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, the London Interbank Offered Rate ("LIBOR") plus 1.75 percent or the CD rate plus 1.875 percent. The effective interest rates on outstanding obligations to third parties as of March 31, 1995 and 1994 were 7.84 percent and 4.65 percent, respectively. 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; -7- 8 second, to JIC 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 JIC the $1,406,647 outstanding advance. In January 1995, the Venture entered into an interest rate protection contract covering outstanding debt obligations of $25,000,000. The Venture paid a fee of $105,000. The agreement protects the Venture from LIBOR interest rates that exceed 9 percent for two years from the date of the agreement. The fee is being charged to interest expense over the life of the agreement using the straight-line method. As a result of their equity contributions to the Venture, IDS Management Corporation and JIC each have an approximate 5 percent equity interest in the Venture, IDS/Jones Growth Partners II, L.P. has an approximate 66 percent interest and the Partnership has an approximate 24 percent interest. If the December 5, 1991 subordinated loans are converted to equity, the ownership percentages will be adjusted accordingly. Regulation and Legislation 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 imposes 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 the Aurora System, 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. 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 and established interim cost-of-service regulations. The FCC's February 22, 1994 regulations will generally require rate reductions, absent a successful cost-of-service showing, of 17 percent of September 30, 1992 rates, adjusted for inflation, channel modifications, equipment costs and increases in programming costs. 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, 1994 and July 14, 1994. 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. RESULTS OF OPERATIONS Revenues of the Venture's Aurora System increased $248,162, or approximately 7 percent, from $3,768,333 for the first quarter of 1994 to $4,016,495 for the comparable 1995 period. An increase in the subscriber base primarily accounted for the increase in revenues. The number of basic subscribers increased 3,171, or approximately 8 percent, from 38,496 at March 31, 1994 to 41,667 at March 31, 1995. Premium service subscriptions increased 2,388, or approximately 9 percent, from 25,650 at March 31, 1994 to 28,038 at March 31, 1995. No other individual factor was significant to the increase in revenues. Operating expenses consist primarily of costs associated with the administration of the Venture's cable television systems. The principal cost components are salaries paid to system personnel, programming expenses, professional fees, subscriber billing costs, rent for leased facilities, cable system maintenance expenses and consumer marketing expenses. Operating expenses increased $181,569, or approximately 8 percent, from $2,163,815 for the first quarter of 1994 to $2,345,384 for the comparable 1994 period. Operating expenses represented 57 percent of revenues in 1994 and 58 percent of revenues in 1995. Increases in programming fees and personnel related expenses, due in part to the increase in the subscriber base, primarily accounted for the increase in operating expenses. No other individual factors contributed significantly to the increase. Management fees and allocated overhead from the General Partners increased $37,476, or approximately 8 percent, from $499,965 for the first three months of 1994 to $537,441 for the comparable 1995 period -8- 9 due to an increase in allocated expenses from the Managing General Partner and the increase in revenues, upon which management and supervision fees and allocated overhead are based. The Managing General Partner has experienced increases in expenses, including personnel costs, a portion of which is allocated to the Venture. Depreciation and amortization expense increased $118,139, or approximately 4 percent, from $2,701,871 at March 31, 1994 to $2,820,010 at March 31, 1995 primarily due to capital additions in 1994. Operating loss increased $89,022, or approximately 6 percent, from $1,597,318 for the first three months of 1994 to $1,686,340 for the comparable 1995 period due to the increases in operating expense, management fees and allocated overhead from the General Partners and depreciation and amortization expense exceeding the increase in revenues. Operating income before depreciation and amortizaton increased $29,117, or approximately 3 percent, from $1,104,553 for the three months ended March 31, 1994 to $1,133,670 for the similar period in 1995. This increase was due to the increase in revenues exceeding the increases in operating expenses and management fees and allocated overhead from the General Partner. Interest expense increased $463,920, or approximately 83 percent, from $556,571 for the first quarter of 1994 to $1,020,491 for the comparable 1995 period. This increase was due to higher effective interest rates and higher outstanding balances on interest bearing obligations. Consolidated loss increased $512,189, or approximately 23 percent, from $2,198,213 for the first quarter of 1994 to $2,710,402 for the comparable 1995 period due to the factors discussed above. Such losses are expected to continue in the future. -9- 10 Part II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. a) Exhibits 27) Financial Data Schedule b) Reports on Form 8-K None -10- 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDS/JONES GROWTH PARTNERS 89-B, LTD. BY: JONES CABLE CORPORATION, its Managing General Partner By: /s/ Kevin P. Coyle Kevin P. Coyle Group Vice President/Finance (Principal Financial Officer) Dated: May 12, 1995 -11- 12 INDEX TO EXHIBITS
Exhibit Description Page - ----------- ----------- ---- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 0 0 0 0 0 0 0 0 226,701 102,393 0 0 0 0 124,308 226,701 0 0 0 0 661,338 0 0 (661,338) 0 (661,338) 0 0 0 (661,338) (10.33) (10.33)
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