-----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, VLKK7RqkPivqiX+nS66mnadkumxwTLetIHim33AZG4CW+QRkaD7GIJqqCxVJleXm bnOU0Bt/FLEvhgga+oQnCw== 0000950134-96-001039.txt : 19960402 0000950134-96-001039.hdr.sgml : 19960402 ACCESSION NUMBER: 0000950134-96-001039 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960401 SROS: NONE 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-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-17734 FILM NUMBER: 96542087 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: 303-792-3111 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-K405 1 FORM 10-K405 1 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, 1995 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 (Registrant's telephone no. office and Zip Code 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 ----- ----- 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 ----- DOCUMENTS INCORPORATED BY REFERENCE: None 2 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. IDS Management Corporation and Intercable each have an approximate 5 percent equity interest in the Venture, Growth Partners II has a 66 percent interest in the Venture, and the Partnership has a 24 percent interest in the Venture. The Partnership does not directly own any cable television system. The Venture owns the cable television systems serving the communities of Aurora, North Aurora, Montgomery, Plano, Oswego, Sandwich, Yorkville and certain unincorporated areas of Kendall and Kane Counties, all in the State of Illinois (the "Aurora System"). See Item 2. CABLE TELEVISION SERVICES. The Aurora System offers to its subscribers various types of programming, which include basic service, tier service, premium service, pay-per-view programs and packages including several of these services at combined rates. Basic cable television service usually consists of signals of all four national television networks, various independent and educational television stations (both VHF and UHF) and certain signals received from satellites. Basic service also usually includes programs originated locally by the system, which may consist of music, news, weather reports, stock market and financial information and live or videotaped programs of a public service or entertainment nature. FM radio signals are also frequently distributed to subscribers as part of the basic service. 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 2 3 completed their theatrical exhibitions and major sporting events, and to pay for such service on a program-by-program basis. REVENUES. Monthly service fees for basic, tier and premium services constitute the major source of revenue for the Aurora System. At December 31, 1995, 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 $22.50 to $22.58, and monthly premium services ranged from $4.95 to $12.95 per premium service. In addition, the Aurora System's pay-per-view programs and advertising fees generate revenues. Related charges may include a nonrecurring installation fee that ranges from $1.99 to $42.45; however, from time to time the Aurora System has followed the common industry practice of reducing or waiving the installation fee during promotional periods. Commercial subscribers such as hotels, motels and hospitals are charged a nonrecurring connection fee that usually covers the cost of installation. Except under the terms of certain contracts with commercial subscribers and residential apartment and condominium complexes, the subscribers are free to discontinue the service at any time without penalty. For the year ended December 31, 1995, of the total fees received by the Aurora System, basic service and tier service fees accounted for approximately 65% of total revenues, premium service fees accounted for approximately 16% of total revenues, pay-per-view fees were approximately 3% of total revenues, advertising fees were approximately 5% of total revenues and the remaining 11% of total revenues came principally from equipment rentals, installation fees and program guide sales. The Aurora System is dependent upon the timely receipt of service fees to provide for maintenance and replacement of plant and equipment, current operating expenses and other costs. FRANCHISES. The Aurora System is constructed and operated under non-exclusive, fixed-term franchises or other types of operating authorities (referred to collectively herein as "franchises") granted by local governmental authorities. These franchises typically contain many conditions, such as time limitations on commencement and completion of construction, conditions of service, including the number of channels, types of programming and the provision of free service to schools and certain other public institutions, and the maintenance of insurance and indemnity bonds. The provisions of local franchises are subject to federal regulation. The Venture holds 9 franchises for the Aurora System. These franchises provide for the payment of fees to the issuing authorities and generally range from 3% to 5% of the gross revenues of a cable television system. The 1984 Cable Act prohibits franchising authorities from imposing annual franchise fees in excess of 5% of gross revenues and also permits the cable television system operator to seek renegotiation and modification of franchise requirements if warranted by changed circumstances. The Venture has never had a franchise revoked. The Venture's franchise expiration dates range from October 1996 to November 2008. The Venture is currently negotiating the renewal of the 1 franchise that will expire prior to December 31, 1996, and the Managing General Partner has no reason to believe that such franchise will not be renewed in due course. Intercable recently has experienced lengthy negotiations with some franchising authorities for the granting of franchise renewals. Some of the issues involved in recent renewal negotiations include rate regulation, customer service standards, cable plant upgrade or replacement and shorter terms of franchise agreements. COMPETITION. Cable television systems currently experience competition from several sources. A potential source of significant competition is Direct Broadcast Satellite ("DBS") services that use video compression technology to increase channel capacity and provide packages of movies, network and other program services that are competitive with those of cable television systems. Two companies offering DBS services began operations in 1994, and two other companies offering DBS service recently began operations. In addition, a joint venture has won the right to provide a DBS service through a FCC spectrum auction. Not all subscribers terminate cable television service upon acquiring a DBS system. The Managing General Partner has observed that a number of DBS subscribers also elect to subscribe to cable television service in order to obtain the greatest 3 4 variety of programming on multiple television sets, including local video services programming not available through DBS service. Although neither the Venture, the Managing General Partner nor Intercable has yet encountered competition from a telephone company providing video services as a cable operator or video dialtone operator, it is anticipated that the cable television systems owned or managed by the Intercable will face such competition in the near future. Legislation recently enacted into law will make it possible for companies with considerable resources to enter the business. For example, in February 1996, one of the regional Bell operating companies entered into an agreement to acquire the nation's third largest cable television company. In addition, several telephone companies have begun seeking cable television franchises from local governmental authorities as a consequence of litigation that successfully challenged the constitutionality of the cable television/telephone company cross-ownership rules. The Managing General Partner cannot predict at this time when and to what extent telephone companies will provide cable television service within service areas in competition with cable television systems owned or managed by the Intercable. The Managing General Partner is aware of the following imminent competition from telephone companies: Ameritech, one of the seven regional Bell operating companies, which provides telephone service in a multi-state region including Illinois, has just obtained a franchise that will allow it to provide cable television service in Naperville, Illinois, a community currently served by a cable system owned by another one of the public limited partnerships managed by Intercable. Ameritech in the future may seek franchises in areas served by the Aurora System. Chesapeake and Potomac Telephone Company of Virginia and Bell Atlantic Video Service Company, both subsidiaries of Bell Atlantic, another of the regional Bell operating companies, have announced their intention to build a cable television system in Alexandria, Virginia in competition with a cable television system owned by Intercable. Bell Atlantic is preparing for the operation of a telecommunications and video business in northern Virginia, including the Alexandria metropolitan area. The FCC has granted GTE Virginia's application for authority to construct, operate, own and maintain video dialtone facilities in northern Virginia, including in the service area of a cable television system owned by Intercable. To date, GTE has not begun construction of a video distribution system. The entry of telephone companies as direct competitors could adversely affect the profitability and market value of Intercable's owned and managed systems. Additional competition is present from several sources, including the following: Master Antenna Television and Satellite Master Antenna Television systems that serve multi-unit dwellings such as condominiums, apartment complexes, motels, hotels and private residential communities; private cable television/telephonic companies that have secured exclusive contracts to provide video and telephony services to multi-unit dwellings and similar complexes; and multichannel, multipoint distribution service ("MMDS") systems, commonly called wireless cable which generally focus on providing service to residents of rural areas. In addition, the FCC has established a new wireless telecommunications service known as Personal Communications Service ("PCS") that would provide portable non-vehicular mobile communications services similar to that available from cellular telephone companies, but at a lower cost. Several cable television multiple system operators hold or have requested experimental licenses from the FCC to test PCS technology. REGULATION AND LEGISLATION. The cable industry is regulated under the Telecommunications Act of 1996 (the "1996 Act"), the Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") and the Cable Communications Policy Act of 1984 (the "1984 Cable Act") and the regulations implementing these statutes. The Federal Communications Commission (the "FCC") has promulgated regulations covering such areas as the registration of cable television systems and other communications businesses, carriage of television broadcast programming, consumer education and lockbox enforcement, origination cablecasting and sponsorship identification, children's programming, the regulation of basic cable and cable programming service rates in areas where cable television systems are not subject to effective competition, signal leakage and frequency use, technical performance, maintenance of various records, equal employment opportunity, and antenna structure notification, marking and lighting. In addition, cable operators periodically are required to file various informational reports with the FCC. The FCC has the authority to enforce these regulations through the imposition of substantial fines, the issuance of cease and desist orders and/or the imposition of administrative sanctions, such as the revocation of FCC licenses needed to operate certain transmission facilities often used in 4 5 connection with cable operations. State or local franchising authorities, as applicable, also have the right to enforce various regulations, impose fines or sanctions, issue orders or seek revocation subject to the limitations imposed upon such franchising authorities by federal, state and local laws and regulations. Several states have assumed regulatory jurisdiction of the cable television industry, and it is anticipated that other states will do so in the future. To the extent the cable television industry begins providing telephone service, additional state regulations will be applied to the cable television industry. Cable television operations are subject to local regulation insofar as systems operate under franchises granted by local authorities. The following is a summary of federal laws and regulations materially affecting the cable television industry, and a description of state and local laws with which the cable industry must comply. Telecommunications Act of 1996. The 1996 Act, which became law on February 28, 1996, substantially revised the Communications Act of 1934, as amended, including the 1984 Cable Act and the 1992 Cable Act, and has been described as one of the most significant changes in communications regulation since the original Communications Act of 1934. The 1996 Act is intended, in part, to promote substantial competition in the telephone local exchange and in the delivery of video and other services. As a result of the 1996 Act, local telephone companies (also known as local exchange carriers or "LECs") and other service providers are permitted to provide video programming, and cable television operators are permitted entry into the telephone local exchange market. The FCC is required to conduct rulemaking proceedings over the next several months to implement various provisions of the 1996 Act. Among other provisions, the 1996 Act modified the 1992 Cable Act by deregulating the cable programming service tier of large cable operators effective March 31, 1999 and the cable programming service tier of small cable operators (those that provide service to 50,000 or fewer subscribers) effective immediately. The 1996 Act also revised the procedures for filing a cable programming service tier rate complaint and adds a new effective competition test. The most far-reaching changes in the communications business will result from the telephony provisions of the 1996 Act. The statute expressly preempts any legal barriers to competition in the local telephone business that previously existed in state and local laws and regulations. Many of these barriers had been lifted by state actions over the last few years, but the 1996 Act completes the task. The 1996 Act also establishes new requirements for maintaining and enhancing universal telephone service and new obligations for telecommunications providers to maintain privacy of customer information. The 1996 Act establishes uniform requirements and standards for entry, competitive carrier interconnection and unbundling of LEC monopoly services. The 1996 Act repealed the cable television/telephone cross-ownership ban adopted in the 1984 Cable Act. The federal cross-ownership ban was particularly important to the cable industry because telephone companies already own certain facilities such as poles, ducts and associated rights of way. While this ban had been overturned by several courts, formal removal of the ban ended the last legal constraints on telephone company plans to enter the cable market. Under the 1996 Act, telephone companies in their capacity as common carriers now may lease capacity to others to provide cable television service. Telephone companies have the option of providing video service as cable operators or through "open video systems" ("OVS"), a regulatory regime that may provide more flexibility than traditional cable service. The 1996 Act exempts OVS operators from many of the regulatory obligations that currently apply to cable operators, such as rate regulation and franchise fees, although other requirements are still applicable. OVS operators, although not subject to franchise fees as defined by the 1992 Cable Act, are subject to fees charged by local franchising authorities or other governmental entities in lieu of franchise fees. (Under certain circumstances, cable operators also will be able to offer service through open video systems.) In addition, the 1996 Act eliminated the requirement that telephone companies file Section 214 applications (applications to provide video dialtone services) with the FCC before providing video service. This limits the opportunity of cable operators to mount challenges at the FCC regarding telephone company entry into the video market. The 1996 Act also contains restrictions on 5 6 buying out incumbent cable operators in a telephone company's service area, especially in suburban and urban markets. Other parts of the 1996 Act also will affect cable operators. Under the 1996 Act, the FCC is required to revise the current pole attachment rate formula. This revision will result in an increase in the rates paid by entities, including cable operators, that provide telecommunication services. The rates will be phased in after a five-year period. (Cable operators that provide only cable services will be unaffected.) Under the V-chip provisions of the 1996 Act, cable operators and other video providers are required to pass along any program rating information that programmers include in video signals. Cable operators also are subject to new scrambling requirements for sexually explicit programming, and cable operators that provide Internet access or other online services are subject to the new indecency limitations for computer services. In addition, cable operators that provide Internet access or other online services are subject to the new indecency limitations for computer services, although these provisions already have been challenged in court, and the courts have preliminarily enjoined the enforcement of these content-based provisions. Under the 1996 Act, a franchising authority may not require a cable operator to provide telecommunications services or facilities, other than an institutional network, as a condition to a grant, renewal or transfer of a cable franchise, and franchising authorities are preempted from regulating telecommunications services provided by cable operators and from requiring cable operators to obtain a franchise to provide such services. The 1996 Cable Act also repealed the 1992 Cable Act's anti-trafficking provision, which generally required the holding of cable television systems for three years. It is premature to predict the specific effects of the 1996 Act on the cable industry in general or the Partnership in particular. The FCC shortly will be undertaking numerous rulemaking proceedings to interpret and implement the 1996 Act. It is not possible at this time to predict the outcome of those proceedings or their effect on the Partnership. Cable Television Consumer Protection and Competition Act of 1992. The 1992 Cable Act, which became effective on December 4, 1992, caused significant changes to the regulatory environment in which the cable television industry operates. The 1992 Cable Act generally mandated 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 the General Partner, became subject to rate regulation of basic cable services. In addition, the 1992 Cable Act allowed 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 General Partner on behalf of the Partnership reduced rates charged for certain regulated services in the Partnership's cable systems effective September 1, 1993. These reductions resulted in some decrease in Partnership revenues and operating income before depreciation and amortization; however, the decrease was not as severe as originally anticipated. The General Partner 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 required 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. Further rate reductions for cable systems whose rates are below the revised benchmark levels, as well as reductions that would require operators to reduce rates below benchmark levels in order to achieve a 17 percent rate reduction, were held in abeyance pending completion of cable system cost studies. The FCC recently requested some of these "low price" systems to complete cost study questionnaires. After review of these questionnaires, the FCC could decide to permanently defer any further rate reductions, or require the additional 7 6 7 percent rate roll back for some or all of these systems. The FCC has also adopted its proposed upgrade methodology by which operators would be permitted to recover the costs of upgrading their plant. 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 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. 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, cable system 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 percent 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 percent 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 the NPT 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. In September 1995, the FCC authorized a new, alternative method of implementing rate adjustments which will allow cable operators to increase rates for programming annually on the basis of projected increases in external costs (inflation, costs for programming, franchise-related obligations and changes in the number of regulated channels) rather than on the basis of cost increases incurred in the preceding calendar quarter. Operators that elect not to recover all of their accrued external costs and inflation pass-throughs each year may recover them (with interest) in subsequent years. In December 1995, the FCC adopted final cost-of-service rate regulations requiring, among other things, cable operators to exclude 34 percent of system acquisition costs related to intangible and tangible assets used to provide regulated services. The FCC also reaffirmed the industry-wide 11.25 percent after tax rate of return on an operator's allowable rate base, but initiated a further rulemaking in which it proposes to use an operator's actual debt cost and capital structure to determine an operator's cost of capital or rate of return. After a rate has been set pursuant to a cost-of-service showing, rate increases for regulated services are indexed for inflation, and operators are permitted to increase rates in response to increases in costs beyond their control, such as taxes and increased programming costs. The United States Court of Appeals for the District of Columbia Circuit recently upheld the FCC's rate regulations implemented pursuant to the 1992 Cable Act, but ruled that the FCC impermissibly failed to permit cable operators to adjust rates for certain cost increases incurred during the period between the date the 1992 Cable Act was passed through the initial date of rate regulation. The FCC has not yet implemented the court's ruling. There have been several lawsuits filed by cable operators and programmers in federal court challenging various aspects of the 1992 Cable Act including its 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 7 8 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. On December 12, 1995, the three-judge federal district court again upheld the must-carry rules' validity. This decision has been appealed to the United States Supreme Court. In 1993, a federal district court 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 and these decisions have been appealed. The FCC's regulations relating to the carriage of indecent programming, which were recently upheld by the United States Court of Appeals for the District of Columbia, have been appealed to the United States Supreme Court. Franchising. The responsibility for franchising or other authorization of cable television systems is left to state and local authorities. There are, however, several provisions in the 1984 Cable Act that govern the terms and conditions under which cable television systems provide service. These include uniform standards and policies that are applicable to cable television operators seeking renewal of a cable television franchise. The procedures established provide for a formal renewal process should the franchising authority and the cable television operator decline to use an informal procedure. A franchising authority unable to make a preliminary determination to renew a franchise is required to hold a hearing in which the operator has the right to participate. In the event a determination is made not to renew the franchise at the conclusion of the hearing, the franchising authority must provide the operator with a written decision stating the specific reasons for non-renewal. Generally, the franchising authority can finally decide not to renew a franchise only if it finds that the cable operator has not substantially complied with the material terms of the present franchise, has not provided reasonable service in light of the community's needs, does not have the financial, legal or 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. A provision of the 1996 Act preempts franchising authorities from regulating telecommunications services provided by cable operators and from requiring cable operators to obtain a franchise to provide such services. A franchising authority may not require a cable operator to provide telecommunications services or facilities, other than an institutional network, as a condition to a grant, renewal or transfer of a cable franchise. GENERAL. 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. 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. 8 9 ITEM 2. PROPERTIES The Aurora System was acquired by the Venture in May 1990. The following sets forth (i) the monthly basic plus service rates charged to subscribers, (ii) the number of basic subscribers and pay units and (iii) the range of franchise expiration dates for the Aurora System. The monthly basic service rates set forth herein represent, with respect to systems with multiple headends, the basic service rate charged to the majority of the subscribers within the system. In cable television systems, basic subscribers can subscribe to more than one pay TV service. Thus, the total number of pay services subscribed to by basic subscribers are called pay units. As of December 31, 1995, the Aurora System operated cable plant, passing approximately 69,500 homes, representing an approximate 63% penetration rate. Figures for numbers of subscribers, miles of cable plant and homes passed are compiled from the Managing General Partner's records and may be subject to adjustments.
At December 31, ---------------------------------------------- AURORA SYSTEM 1995 1994 1993 ------------- ---- ---- ---- Monthly basic plus service rate $ 22.58 $ 21.08 $ 21.08 Basic subscribers 43,982 40,666 37,426 Pay units 25,938 27,856 28,283
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, 1996, the number of equity security holders in the Partnership was 2,938. 9 10 Item 6. Selected Financial Data
For the Year Ended December 31, ------------------------------------------------------------------------------ IDS/Jones Growth Partners 89-B, Ltd. 1995 1994 1993 1992 1991 - ------------------------------------ ----------- ------------- ---------- ----------- ----------- Revenues $ - $ - $ - $ - $ - Depreciation and Amortization - - - - - Operating Income - - - - - Net Loss (2,237,773) (2,171,573) (2,011,841) (2,005,831) (3,124,096) Net Loss per Limited Partnership Unit (34.95) (33.92) (31.42) (31.33) (48.80) Weighted Average Number of Limited Partnership Units Outstanding 63,383 63,383 63,383 63,383 63,383 General Partners' Deficit (153,754) (130,876) (109,160) (89,042) (68,984) Limited Partners' Capital (Deficit) (1,298,873) 916,522 3,066,379 5,160,495 7,146,268 Total Assets - 888,039 3,059,612 5,071,453 7,077,284 Debt - - - - -
IDS/Jones Joint Venture Partners For the Year Ended December 31, - -------------------------------- ------------------------------------------------------------------------------ 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- Revenues $16,860,900 $15,388,489 $15,196,068 $14,486,583 $13,196,389 Depreciation and Amortization 10,317,694 10,601,501 10,883,845 10,507,110 10,474,319 Operating Loss (5,411,813) (5,888,186) (5,816,179) (5,481,821) (6,105,858) Net Loss (9,171,199) (8,899,892) (8,245,251) (8,220,617) (10,158,372) Partners' Capital 2,830,078 12,001,277 20,901,169 29,146,420 37,367,037 Total Assets 51,448,914 57,752,046 64,595,970 73,796,057 80,534,496 Debt 45,909,122 43,566,064 41,604,580 43,678,543 41,825,847 Jones Intercable, Inc. Advances 331,185 933,949 1,056,828 345,859 486,652
10 11 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 a 24 percent interest in the Venture. The Partnership's investment in this cable television joint venture, accounted for under the equity method, decreased by $2,237,773 compared to the December 31, 1994 balance. This decrease represents the Partnership's share of losses generated by the Venture during 1995. 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 1995 Compared to 1994 Revenues of the Venture's Aurora System totaled $16,860,900 in 1995 compared to $15,388,489 in 1994, an increase of $1,472,411, or approximately 10 percent. An increase in the number of basic subscribers accounted for approximately 57 percent of the increase in revenues. The number of basic subscribers totaled 43,982 at December 31, 1995 compared to 40,666 at December 31, 1994, an increase of 3,316, or approximately 8 percent. Basic service rate adjustments accounted for approximately 40 percent of the increase in revenues. The increase in revenues was partially offset by a decrease in premium service subscriptions. The number of premium service subscriptions decreased 1,918, or approximately 7 percent, to 25,938 at December 31, 1995 from 27,856 at December 31, 1994. No other individual factor was significant to the increase in revenues. Operating expenses consist primarily of costs associated with the administration of the Aurora System. The principal cost components are salaries paid to system personnel, programming expenses, professional fees, subscriber billing costs, rent for leased facilities, cable system maintenance expenses and consumer marketing expenses. Operating expenses totaled $9,809,178 in 1995 compared to $8,655,004 in 1994, an increase of $1,154,174, or approximately 13 percent. Operating expenses represented 58 percent of revenues in 1995 and 56 percent of revenues in 1994. Increases in programming fees, personnel expenses and office related expenses primarily accounted for the increase in operating expenses in 1995. No other individual factor contributed significantly to the increase. Management and supervision fees and allocated overhead from the General Partners totaled $2,145,841 in 1995 compared to $2,020,170 in 1994, an increase of $125,671, or approximately 6 percent. The increase was primarily due to the increase in revenues, upon which such management and supervision fees are based. Depreciation and amortization expense totaled $10,317,694 in 1995 compared to $10,601,501 in 1994, a decrease of $283,807, or approximately 3 percent. The decrease was due to the maturation of a portion of the tangible asset base. Operating loss totaled $5,411,813 in 1995 compared to $5,888,186 in 1994, a decrease of $476,373, or approximately 8 percent. The decrease was due to the increase in revenues and the decrease in depreciation and amortization expense exceeding the increases in operating expenses and management and supervision fees and allocated overhead from the General Partners. The cable television industry generally measures the financial performance of a cable television system in terms of cash flow or operating income before depreciation and amortization. The value of a cable television system is often 11 12 determined using multiples of cash flow. This measure is not intended to be a substitute or improvement upon the items disclosed on the financial statements, rather it is included because it is an industry standard. Operating income before depreciation and amortization totaled $4,905,881 in 1995 compared to $4,713,315 in 1994, an increase of $192,566, or approximately 4 percent. The increase was due to the increase in revenues exceeding the increases in operating expenses and management and supervision fees and allocated overhead from the General Partners. Interest expense totaled $3,767,376 in 1995 compared to $2,856,678 in 1994, an increase of $910,698, or approximately 32 percent. The increase was due to higher effective interest rates and higher outstanding balances on interest bearing obligations. Consolidated loss totaled $9,171,199 in 1995 compared to $8,899,892 in 1994, an increase of $271,307, or approximately 3 percent. This increase was due to the factors discussed above. 1994 Compared to 1993 Revenues of the Venture increased $192,421, or approximately 1 percent, to $15,388,489 in 1994 from $15,196,068 in 1993. 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 1993. No other individual factor was significant to the increase in revenues. Operating expenses increased $545,609, or approximately 7 percent, to $8,655,004 in 1994 from $8,109,395 in 1993. Operating expenses represented 53 percent of revenue in 1993 and 56 percent in 1994. Increases in programming expenses, due in part to the increase in the subscriber base, were primarily responsible for the increase in operating expenses. No other individual factors contributed significantly to the increase. Management and supervision fees and allocated overhead from the General Partners increased $1,163, less than 1 percent, to $2,020,170 in 1994 from $2,019,007 in 1993 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 the Managing General Partner resulting from a change in allocation methods effective December 1, 1993. Depreciation and amortization expense decreased $282,344, or approximately 3 percent, to $10,601,501 in 1994 from $10,883,845 in 1993 due to the maturation of a portion of the Venture's intangible asset base. Operating loss increased $72,007, or approximately 1 percent, to $5,888,186 in 1994 from $5,816,179 in 1993 due to the increases in operating expenses and management and supervision fees from the General Partners exceeding the increase in revenues and the decrease in depreciation and amortization expense. Operating income before depreciation and amortization decreased $354,351, or approximately 7 percent, to $4,713,315 in 1994 from $5,067,666 in 1993 due to the increases in operating expenses and management and supervision fees from the General Partners exceeding the increase in revenues. Interest expense increased $606,572, or approximately 27 percent, to $2,856,678 in 1994 from $2,250,106 in 1993 due to higher effective interest rates and higher outstanding balances on interest bearing obligations. Consolidated loss increased $654,641, or approximately 8 percent, to $8,899,892 in 1994 from $8,245,251 in 1993. This loss was due to the factors discussed above. FINANCIAL CONDITION For the year ended December 31, 1995, the Venture generated net cash from operating activities totaling $1,583,254, which is available to fund capital expenditures and non-operating costs. During 1995, the Venture expended approximately $3,872,000 on capital expenditures. Approximately 50 percent of the expenditures related to plant extensions. Approximately 28 percent of the expenditures related to construction of service drops to subscriber homes. The remainder of the expenditures was used for various enhancements in the Aurora System. Funding for these 12 13 expenditures was provided by cash on hand, cash generated from operations and borrowings from the Venture's credit facility. Budgeted capital expenditures for 1996 are approximately $4,061,000. Approximately 33 percent of the expenditures are for plant extensions. Approximately 13 percent of the expenditures are for construction of service drops to subscriber homes. Approximately 9 percent of the anticipated capital expenditures are for system rebuilds and upgrades. The remainder is 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 has been repaid. See discussion below. The loans from Intercable and IDS Management Corporation are subordinate to the Venture's revolving credit and term loan. These loans have matured. Although IDS Management Corporation and Intercable have not formally extended their loans, they have not demanded repayment. In the first quarter of 1994, Intercable agreed to subordinate to all other Venture debt its $1,406,647 advance to the Venture outstanding at March 30, 1994 and IDS Management Corporation made an additional loan of $1,000,000 to the Venture to fund principal repayments due at the end of March 1994 on the Venture's then-outstanding term loan. In the second quarter of 1994, Intercable made a loan of $1,000,000 to the Venture to fund principal repayments due at the end of June 1994 on the Venture's then-outstanding term loan. This loan has been repaid. See discussion below. The interest rates on the respective loans, which will vary from time to time, with respect to IDS Management Corporation's loans, are at its cost of borrowing, and, with respect to Intercable's loans, are at its weighted average cost of borrowing. It is anticipated that the remaining loans will be repaid over time with borrowings from the Venture's revolving credit and term loan, as discussed below. If the December 5, 1991 loans are not fully repaid, Intercable and IDS Management Corporation, respectively, will have the right, among other rights, to convert the unpaid portion of these loans to equity in the Venture. In November 1994, the Venture entered into a revolving credit and term loan agreement with a commercial bank. This credit facility has a maximum amount available of $45,000,000. At December 31, 1995, $40,800,000 was outstanding under this agreement, leaving $4,200,000 available for future needs of the Venture. Borrowings from this 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 June 1994 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. During the second quarter of 1995, the Venture repaid IDS Management Corporation an additional $120,000 of principal plus interest on the $1,800,000 loan dated December 5, 1991, leaving $800,000 of principal remaining to be repaid on this loan. The revolving credit period of the Venture's credit facility expires January 1, 1997, at which time the then-outstanding balance converts to a term loan payable in 28 consecutive quarterly installments. Interest on the 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 Certificate of Deposit Rate plus 1.875 percent. The Venture anticipates repaying the remaining notes outstanding to related parties with borrowings from this 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 $800,000 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 subordinated advance. As a result of their equity contributions to the Venture, IDS Management Corporation and Intercable each have 5 percent equity interest in the Venture, the Partnership has a 24 percent interest and IDS/Jones Growth Partners II, L.P. has a 66 percent interest. If any unpaid portion of the December 5, 1991 subordinated loans are converted to equity, the ownership percentages will be adjusted accordingly. REGULATION AND LEGISLATION The Venture has filed cost-of-service showings in response to rulemakings concerning the 1992 Cable Act for its Aurora System and thus anticipates no further reductions in rates in these systems. The cost-of-service showings have not yet received final approvals from regulatory authorities, however, and there can be no assurance that the Partnership's cost-of-service showings will prevent further rate reductions in these systems until such final approvals are received. 13 14 The Telecommunications Act of 1996 (the "1996 Act"), which became law on February 8, 1996, substantially revised the Communications Act of 1934, as amended, including the 1984 Cable Act and the 1992 Cable Act, and has been described as one of the most significant changes in communications regulation since the original Communications Act of 1934. The 1996 Act is intended, in part, to promote substantial competition in the telephone local exchange and in the delivery of video and other services. As a result of the 1996 Act, local telephone companies (also known as local exchange carriers or "LECs") and other service providers are permitted to provide video programming, and cable television operators are permitted entry into the telephone local exchange market. The FCC is required to conduct rulemaking proceedings over the next several months to implement various provisions of the 1996 Act. Among other provisions, the 1996 Act modified the 1992 Cable Act by deregulating the cable programming service tier of large cable operators including the Venture effective March 31, 1999 and the cable programming service tier of "small" cable operators in systems providing service to 50,000 or fewer subscribers effective immediately. The 1996 Act also revised the procedures for filing cable programming service tier rate complaints and adds a new effective competition test. It is premature to predict the specific effects of the 1996 Act on the cable industry in general or the Venture in particular. The FCC will be undertaking numerous rulemaking proceedings to interpret and implement the 1996 Act. It is not possible at this time to predict the outcome of those proceedings or their effect on the Venture. See Item 1. 14 15 Item 8. Financial Statements IDS/JONES GROWTH PARTNERS 89-B, LTD. FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 AND 1994 INDEX
Page ---------------------------- 89-B Venture -------- ------- Report of Independent Public Accountants 16 24 Balance Sheets 17 25 Statements of Operations 18 27 Statements of Partners' Capital (Deficit) 19 28 Statements of Cash Flows 20 29 Notes to Financial Statements 21 30
15 16 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, 1995 and 1994, and the related statements of operations, partners' capital (deficit) and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Managing General Partner's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS/Jones Growth Partners 89-B, Ltd. as of December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Denver, Colorado, March 8, 1996. 16 17 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) BALANCE SHEETS
December 31, ------------------------------- 1995 1994 ------------ ------------ ASSETS $ - $ - ------ ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ------------------------------------------- LIABILITIES: Loss in excess of investment in (investment in) cable television joint venture $ 1,349,734 $ (888,039) Accounts payable -affiliate 102,393 102,393 ------------ ------------ Total liabilities 1,452,127 (785,646) ------------ ------------ PARTNERS' CAPITAL (DEFICIT): General Partners- Contributed capital 500 500 Accumulated deficit (153,754) (131,376) ------------ ------------ (153,254) (130,876) ------------ ------------ Limited Partners- Contributed capital (63,383 units outstanding at December 31, 1995 and 1994) 12,623,901 12,623,901 Accumulated deficit (13,922,774) (11,707,379) ------------ ------------ (1,298,873) 916,522 ------------ ------------ Total liabilities and partners' capital (deficit) $ - $ - ============ ============
The accompanying notes to financial statements are an integral part of these balance sheets. 17 18 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) STATEMENTS OF OPERATIONS
Year Ended December 31, ------------------------------------------------ 1995 1994 1993 ------------ ------------ ------------ EQUITY IN NET LOSS OF CABLE TELEVISION JOINT VENTURE $ (2,237,773) $ (2,171,573) $ (2,011,841) ------------ ------------ ------------ NET LOSS $ (2,237,773) $ (2,171,573) $ (2,011,841) ============ ============ ============ ALLOCATION OF NET LOSS: General Partners $ (22,378) $ (21,716) $ (20,118) ============ ============ ============ Limited Partners $ (2,215,395) $ (2,149,857) $ (1,991,723) ============ ============ ============ NET LOSS PER LIMITED PARTNERSHIP UNIT $ (34.95) $ (33.92) $ (31.42) ============ ============ ============ WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP UNITS OUTSTANDING 63,383 63,383 63,383 ============ ============ ============
The accompanying notes to financial statements are an integral part of these statements. 18 19 IDS/JONES GROWTH PARTNERS 89-B, LTD. (A Limited Partnership) STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31, ---------------------------------------------------- 1995 1994 1993 ----------- ------------ ----------- GENERAL PARTNERS: Jones Cable Corporation Balance, beginning of year $ (65,438) $ (54,580) $ (44,521) Net loss for year (11,189) (10,858) (10,059) ----------- ------------ ----------- Balance, end of year $ (76,627) $ (65,438) $ (54,580) =========== ============ =========== IDS Cable Corporation Balance, beginning of year $ (65,438) $ (54,580) $ (44,521) Net loss for year (11,189) (10,858) (10,059) ----------- ------------ ----------- Balance, end of year $ (76,627) $ (65,438) $ (54,580) =========== ============ =========== Total Balance, beginning of year $ (130,876) $ (109,160) $ (89,042) Net loss for year (22,378) (21,716) (20,118) ----------- ------------ ----------- Balance, end of year $ (153,254) $ (130,876) $ (109,160) =========== ============ =========== LIMITED PARTNERS: Balance, beginning of year $ 916,522 $ 3,066,379 $ 5,160,495 Less-Syndication costs - - (102,393) Net loss for year (2,215,395) (2,149,857) (1,991,723) ----------- ------------ ----------- Balance, end of year $ (1,298,873) $ 916,522 $ 3,066,379 =========== ============ ===========
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 CASH FLOWS
Year Ended December 31, ----------------------------------------------- 1995 1994 1993 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(2,237,773) $(2,171,573) $(2,011,841) Adjustments to reconcile net loss to net cash provided by operating activities: Equity in net loss of Cable Television Joint Venture 2,237,773 2,171,573 2,011,841 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. 20 21 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 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, 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 and in June 1995. As a result of their equity contributions to the Venture, IDS Management Corporation and Intercable each have a 5 percent equity interest in the Venture, Growth Partners II has a 66 percent interest and the Partnership has a 24 percent interest. 21 22 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Records The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. The Partnership's tax returns are also prepared on the accrual basis. The preparation of financial statements in conformity with generally accepted accounting principles requires the General Partner's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investment in Cable Television Joint Venture The investment in the Venture is accounted for under the equity method. The Venture incurred losses of $9,171,199, $8,899,892 and $8,245,251 in 1995, 1994 and 1993, respectively, of which $2,237,773, $2,171,573 and $2,011,841, respectively, were allocated to the Partnership. The operations of the Venture are significant to the Partnership and should be reviewed in conjunction with these financial statements. Reference is made to the accompanying financial statements of the Venture on pages 25 to 35. (3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES Management Fees, Supervision Fees, Distribution Ratios and Reimbursements Intercable manages the Partnership and the Venture and receives a fee for its services equal to 5 percent of the gross revenues of the Venture, excluding revenues from the sale of cable television systems or franchises. Management fees paid to Intercable by the Venture during the years ended December 31, 1995, 1994 and 1993 (reflecting the Partnership's 24 percent interest in the Venture) were $205,703, $187,739 and $185,392, 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, 1995, 1994 and 1993 (reflecting the Partnership's 24 percent interest in the Venture) were $20,570, $18,774 and $18,539, 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, 1995, the Partnership had made no such distributions. The Partnership reimburses Intercable for certain allocated overhead and administrative expenses. These expenses represent the salaries and related benefits paid for corporate personnel, rent, data processing services and other corporate facilities costs. Such personnel provide engineering, marketing, administrative, accounting, legal and investor relations services to the Partnership. Allocations of personnel costs are based on actual time spent by employees of Intercable with respect to each partnership managed. Remaining expense are allocated based on the pro rata relationship of the Venture's revenues to the total revenues of all systems owned or managed by Intercable and certain of its affiliates. Systems owned by Intercable and all other systems owned by partnerships for which Intercable or affiliates are the general partners are also allocated a proportionate share of these expenses. The Managing General Partner believes that the methodology used in allocating overhead and administrative expenses is reasonable. Reimbursements made to Intercable by the Partnership for allocated overhead and administrative expenses during the years ended December 31, 1995, 1994 and 1993 (reflecting the Partnership's 24 percent interest in the Venture) were $297,312, $286,408 and $288,707, respectively. The Supervising General Partner may also be reimbursed for certain expenses incurred on behalf of the Partnership. There 22 23 were no reimbursements made to the Supervising General Partner for allocated overhead and administrative expenses during the years ended December 31, 1995, 1994 and 1993. (4) INCOME TAXES Income taxes have not been recorded in the accompanying financial statements because they accrue directly to the partners. The federal and state income tax returns of the Partnership are prepared and filed by the Managing General Partner. The Partnership's tax returns, the qualification of the Partnership as such for tax purposes, and the amount of distributable partnership income or loss are subject to examination by federal and state taxing authorities. If such examinations result in changes with respect to the Partnership's qualification as such, or in changes with respect to the Partnership's recorded income or loss, the tax liability of the general and limited partners would likely be changed accordingly. Taxable loss reported by the partners is different from that reported in the statements of operations due to the difference in depreciation allowed under generally accepted accounting principles and the expense allowed for tax purposes under the Modified Accelerated Cost Recovery System (MACRS). There are no other significant differences between taxable loss and the net loss reported in the statements of operations. 23 24 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, 1995 and 1994, and the related statements of operations, partners' capital (deficit) and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Managing General Partner's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS/Jones Joint Venture Partners as of December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Denver, Colorado, March 8, 1996. 24 25 IDS/JONES JOINT VENTURE PARTNERS (A General Partnership) BALANCE SHEETS
December 31, -------------------------------------- ASSETS 1995 1994 ------ ------------- ------------ CASH $ 6,803 $ 57,284 TRADE RECEIVABLES, less allowance for doubtful receivables of $49,993 and $50,993 at December 31, 1995 and 1994, respectively 463,098 403,428 INVESTMENT IN CABLE TELEVISION PROPERTIES: Property, plant and equipment, at cost 38,380,661 34,508,868 Less-accumulated depreciation (17,672,119) (14,180,482) ------------- ------------ 20,708,542 20,328,386 Franchise costs, net of accumulated amortization of $36,763,405 and $31,231,579 at December 31, 1995 and 1994, respectively 21,803,716 27,335,542 Subscriber lists, net of accumulated amortization of $6,020,842 and $4,951,136 at December 31, 1995 and 1994, respectively 1,598,661 2,668,367 Costs in excess of interests in net assets purchased, net of accumulated amortization of $1,045,974 and $859,836 at December 31, 1995 and 1994, respectively 6,465,397 6,651,535 ------------- ------------ Total investment in cable television properties 50,576,316 56,983,830 DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 402,697 307,504 ------------- ------------ Total assets $ 51,448,914 $ 57,752,046 ============= ============
The accompanying notes to financial statements are an integral part of these balance sheets. 25 26 IDS/JONES JOINT VENTURE PARTNERS (A General Partnership) BALANCE SHEETS
December 31, -------------------------------------- LIABILITIES AND PARTNERS' CAPITAL 1995 1994 --------------------------------- ----------- ----------- LIABILITIES: Debt $ 45,909,122 $ 43,566,064 Accounts payable-Jones Intercable, Inc. 331,185 933,949 Accrued liabilities 2,315,955 1,195,893 Subscriber prepayments 62,574 54,863 ----------- ----------- Total liabilities 48,618,836 45,750,769 ----------- ----------- COMMITMENTS AND CONTINGENCIES (Note 7) PARTNERS' CAPITAL: Contributed capital 57,344,709 57,344,709 Accumulated deficit (54,514,631) (45,343,432) ------------ ----------- 2,830,078 12,001,277 ----------- ----------- Total liabilities and partners' capital $ 51,448,914 $ 57,752,046 =========== ===========
The accompanying notes to financial statements are an integral part of these balance sheets. 26 27 IDS/JONES JOINT VENTURE PARTNERS (A General Partnership) STATEMENTS OF OPERATIONS
Year Ended December 31, -------------------------------------------------- 1995 1994 1993 ------------ ----------- ----------- REVENUES $ 16,860,900 $ 15,388,489 $ 15,196,068 COSTS AND EXPENSES: Operating expenses 9,809,178 8,655,004 8,109,395 Management and supervision fees and allocated overhead from affiliates 2,145,841 2,020,170 2,019,007 Depreciation and amortization 10,317,694 10,601,501 10,883,845 ------------ ----------- ----------- OPERATING LOSS (5,411,813) (5,888,186) (5,816,179) ------------ ----------- ----------- OTHER INCOME (EXPENSE): Interest expense (3,767,376) (2,856,678) (2,250,106) Other, net 7,990 (155,028) (178,966) ------------ ----------- ----------- Total other income (expense) (3,759,386) (3,011,706) (2,429,072) ------------ ----------- ----------- NET LOSS $ (9,171,199) $ (8,899,892) $ (8,245,251) ============ =========== ===========
The accompanying notes to financial statements are an integral part of these statements. 27 28 IDS/JONES JOINT VENTURE PARTNERS (A General Partnership) STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31, ------------------------------------------------ 1995 1994 1993 ----------- ----------- ----------- IDS/JONES GROWTH PARTNERS 89-B: Balance, beginning of year $ 888,039 $ 3,059,612 $ 5,071,453 Net loss for year (2,237,773) (2,171,573) (2,011,841) ----------- ----------- ----------- Balance, end of year $ (1,349,734) $ 888,039 $ 3,059,612 =========== =========== =========== IDS/JONES GROWTH PARTNERS II: Balance, beginning of year $ 7,960,592 $ 13,798,921 $ 19,207,805 Net loss for year (6,016,306) (5,838,329) (5,408,884) ----------- ----------- ----------- Balance, end of year $ 1,944,286 $ 7,960,592 $ 13,798,921 =========== =========== ========== JONES INTERCABLE, INC.: Balance, beginning of year $ 1,576,323 $ 2,021,318 $ 2,433,581 Net loss for year (458,560) (444,995) (412,263) ----------- ----------- ----------- Balance, end of year $ 1,117,763 $ 1,576,323 $ 2,021,318 =========== ========== ========== IDS MANAGEMENT CORPORATION: Balance, beginning of year $ 1,576,323 $ 2,021,318 $ 2,433,581 Net loss for year (458,560) (444,995) (412,263) ----------- ----------- ----------- Balance, end of year $ 1,117,763 $ 1,576,323 $ 2,021,318 =========== ========== ========== TOTAL: Balance, beginning of year $ 12,001,277 $ 20,901,169 $ 29,146,420 Net loss for year (9,171,199) (8,899,892) (8,245,251) ----------- ----------- ----------- Balance, end of year $ 2,830,078 $ 12,001,277 $ 20,901,169 =========== =========== ===========
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 CASH FLOWS
Year Ended December 31, ---------------------------------------------- 1995 1994 1993 ------------ ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (9,171,199) $ (8,899,892) $(8,245,251) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 10,317,694 10,601,501 10,883,845 Amortization of interest rate protection contract 52,500 - - Decrease (increase) in trade receivables (59,670) (37,919) 15,099 Decrease (increase) in deposits, prepaid expenses and deferred charges (81,080) (156,732) 11,335 Increase in accrued liabilities and subscriber prepayments 1,127,773 217,363 408,138 Increase (decrease) in advances from Jones Intercable, Inc. (602,764) (122,879) 710,989 ------------ ----------- ---------- Net cash provided by operating activities 1,583,254 1,601,442 3,784,155 ------------ ----------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment, net (3,871,793) (3,587,639) (2,997,575) ------------- ----------- ---------- Net cash used in investing activities (3,871,793) (3,587,639) (2,997,575) ------------- ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 3,016,410 40,900,085 - Repayment of debt (673,352) (38,938,601) (2,073,963) Purchase of interest rate protection contract (105,000) - - ------------ ----------- ---------- Net cash provi)efinancingdactivities 2,238,058 1,961,484 (2,073,963) ------------ ----------- ---------- Decrease in cash (50,481) (24,713) (1,287,383) Cash, beginning of year 57,284 81,997 1,369,380 ------------ ----------- ---------- Cash, end of year $ 6,803 $ 57,284 $ 81,997 ============ =========== ========== SUPPLEMENTAL CASH FLOW DISCLOSURE: Interest paid $ 2,974,550 $ 2,516,358 $ 2,069,821 ============ =========== ==========
The accompanying notes to financial statements are an integral part of these statements. 29 30 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 revolving credit and term loan agreement. These loans have matured. Although IDS Management Corporation and Intercable have not formally extended their loans, they have not demanded repayment. In the first quarter of 1994, Intercable agreed to subordinate to all other Venture debt its $1,406,647 advance to the Venture outstanding at March 30, 1994 and IDS Management Corporation made an additional loan of $1,000,000 to the Venture to fund principal repayments due at the end of March 1994 on the Venture's then-outstanding term loan. In the second quarter of 1994, Intercable made a loan of $1,000,000 to the Venture to fund principal repayments due at the end of June 1994 on the Venture's then-outstanding term loan. This loan has been repaid. 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 revolving credit and term loan, as discussed in Note (5). If the December 5, 1991 loans are not fully repaid, Intercable and IDS Management Corporation, respectively, will have the right, among other rights, to convert the unpaid portion of these loans to equity in the Venture. As a result of their equity contributions to the Venture, IDS Management Corporation and Intercable each have a 5 percent equity interest in the Venture, IDS/Jones II has 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. 30 31 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. The preparation of financial statements in conformity with generally accepted accounting principles requires the General Partner's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Allocation of Cost of Purchased Cable Television System The total purchase price of the Aurora System purchased by the Venture was allocated as follows: first, to the fair value of net tangible assets acquired; second, to the value of subscriber lists; third, to franchise costs; and fourth, to costs in excess of interests in net assets purchased. Acquisition fees paid to affiliates of the Managing General Partner and Supervising General Partner and other acquisition costs were capitalized and charged to intangible assets. Property, Plant and Equipment Depreciation of property, plant and equipment is provided primarily using the straight-line method over the following estimated service lives: Cable distribution systems 5 - 15 years Equipment and tools 5 years Office furniture and equipment 5 years Buildings 10 - 20 years Vehicles 3 years
Replacements, renewals and improvements are capitalized and maintenance and repairs are charged to expense as incurred. 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 5 years Subscriber lists 2 years Costs in excess of interests in net assets purchased 35 years
Revenue Recognition Subscriber prepayments are initially deferred and recognized as revenue when earned. Reclassification Certain prior year amounts have been reclassified to conform to the 1995 presentation. 31 32 (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, 1995, 1994, 1993 were $843,045, $769,424 and $759,803, respectively. 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, 1995, 1994, 1993 were $84,305, $76,942 and $75,980, respectively. The Venture reimburses Intercable for certain allocated overhead and administrative expenses. These expenses represent the salaries and related benefits paid for corporate personnel, rent, data processing services and other corporate facilities costs. Such personnel provide engineering, marketing, administrative, accounting, legal and investor relations services to the Venture. Allocations of personnel costs are based on actual time spent by employees of Intercable with respect to each partnership managed. Remaining expenses are allocated based on the pro rata relationship of the Venture's revenues to the total revenues of all systems owned or managed by Intercable and certain of its affiliates. Systems owned by Intercable and all other systems owned by partnerships for which Intercable or affiliates are the general partners are also allocated a proportionate share of these expenses. Intercable believes that the methodology used in allocating overhead and administrative expenses is reasonable. Reimbursements made to Intercable by the Venture for allocated overhead and administrative expenses during the year ended December 31, 1995, 1994, 1993 were $1,218,491, $1,173,804 and $1,183,224, 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, 1995, 1994 and 1993. The Venture was charged interest by Intercable at an average interest rate of 10.51 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, 1995, 1994 and 1993 was $481,211, $386,257 and $192,746, respectively. The Venture was charged interest on the subordinated loans from IDS Management Corporation at an average interest rate of 7 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, 1995, 1994 and 1993 was $120,970, $113,458 and $65,653, respectively. Payments to Affiliates for Programming Services The Venture receives programming from Product Information Network, Superaudio, Mind Extension University and Jones Computer Network, all of which are affiliates of Intercable. Payments to Superaudio totaled $23,928, $23,558 and $22,627, respectively, during the years ended December 31, 1995, 1994 and 1993. Payments to Mind Extension University totaled $25,603, $21,347 and $13,168, respectively, during the years ended December 31, 1995, 1994 and 1993. Payments to Jones Computer Network, which initiated service in 1994, totaled $51,138 and $12,421 in 1995 and 1994, respectively. 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 totaling $29,347 and $11,442 in 1995 and 1994, respectively. 32 33 (4) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 1995 and 1994, consisted of the following:
1995 1994 ------------ ------------ Cable distribution systems $ 36,726,927 $ 33,009,001 Equipment and tools 661,881 545,129 Office furniture and equipment 290,671 271,414 Vehicles 622,722 604,864 Building 78,460 78,460 ----------- ----------- 38,380,661 34,508,868 Less-accumulated depreciation (17,672,119) (14,180,482) ----------- ----------- $ 20,708,542 $ 20,328,386 =========== ===========
(5) DEBT Debt consists of the following:
December 31, -------------------------------- 1995 1994 ------------- -------------- Lending institutions- Revolving credit agreement $ 40,800,000 $ 38,300,000 Affiliated entities - Subordinated notes payable 5,006,647 5,126,647 Capital lease obligations 102,475 139,417 ------------ ------------ $ 45,909,122 $ 43,566,064 ============ ============
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 has been repaid. See discussion below. The loans from Intercable and IDS Management Corporation are subordinate to the Venture's revolving credit and term loan. These loans have matured. Although IDS Management Corporation and Intercable have not formally extended their loans, they have not demanded repayment. In the first quarter of 1994, Intercable agreed to subordinate to all other Venture debt its $1,406,647 advance to the Venture outstanding at March 30, 1994 and IDS Management Corporation made an additional loan of $1,000,000 to the Venture to fund principal repayments due at the end of March, 1994 on the Venture's then-outstanding term loan. In the second quarter of 1994, Intercable made a loan of $1,000,000 to the Venture to fund principal repayments due at the end of June, 1994 on the Venture's then-outstanding term loan. This loan has been repaid. See discussion below. The interest rates on the respective loans, which will vary from time to time, with respect to IDS Management Corporation's loans, are at its cost of borrowing, and, with respect to Intercable's loans, are at its weighted average cost of borrowing. It is anticipated that the remaining loans will be repaid over time with borrowings from the Venture's revolving credit and term loan, as discussed below. If the December 5, 1991 loans are not fully repaid, Intercable and IDS Management Corporation, respectively, will have the right, among other rights, to convert the unpaid portion of these loans to equity in the Venture. In November 1994, the Venture entered into a revolving credit and term loan agreement with a commercial bank. This credit facility has a maximum amount available of $45,000,000. At December 31, 1995, $40,800,000 was outstanding under this agreement, leaving $4,200,000 available for the future needs of the Venture. Borrowings from this 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 June 1994 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 33 34 expenditures. During the second quarter of 1995, the Venture repaid IDS Management Corporation an additional $120,000 of principal plus interest on the $1,800,000 loan dated December 5, 1991, leaving $800,000 of principal remaining to be repaid on this loan. The revolving credit period expires January 1, 1997, at which time the then-outstanding balance converts to a term loan payable in 28 consecutive quarterly installments. Interest on the 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 Certificate of Deposit Rate plus 1.875 percent. The Venture anticipates repaying the remaining notes outstanding to related parties with borrowings from this 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 $800,000 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 subordinated 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. Installments due on debt principal for each of the five years in the period ending December 31, 2000 and thereafter, respectively, are: $5,037,389, $2,070,742, $4,110,743, $4,906,248, $6,120,000 and $23,664,000. At December 31, 1995, the carrying amount of the Venture's long-term debt did not differ significantly from the estimated fair value of the financial instruments. The fair value of the Venture's long-term debt is estimated based on the discounted amount of future debt service payments using rates of borrowing for a liability of similar risk. (6) INCOME TAXES Income taxes have not been recorded in the accompanying financial statements because they accrue directly to the partners. The federal and state income tax returns of the Venture are prepared and filed by the Managing General Partner. The Venture's tax returns, the qualification of the Venture as 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 The Venture rents office and other facilities under various long-term lease arrangements. Rent paid under such lease arrangements totaled $105,400, $60,313 and $106,840, respectively, for the years ended December 31, 1995, 1994 and 1993. Minimum commitments under leases for the five years in the period ending December 31, 2000, and thereafter are as follows: 1996 $ 105,240 1997 16,730 1998 16,730 1999 16,730 2000 1,394 Thereafter - --------- $ 156,824 =========
34 35 (8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION Supplementary profit and loss information is presented below:
Year Ended December 31, ------------------------------------------------ 1995 1994 1993 ------------ ------------ ----------- Maintenance and repairs $ 152,338 $ 133,849 $ 115,863 =========== ========== ========== Taxes, other than income and payroll taxes $ 23,470 $ 11,949 $ 25,485 =========== =========== ========== Advertising $ 374,340 $ 423,866 $ 346,457 =========== ========== ========== Depreciation of property, plant and equipment $ 3,491,637 $ 3,810,089 $ 3,467,318 =========== ========== ========== Amortization of intangible assets $ 6,826,057 $ 6,791,412 $ 7,416,527 =========== ========== ==========
35 36 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.
Name Age Positions with the Managing General Partner ---- --- ------------------------------------------- Glenn R. Jones 66 Chairman of the Board and Chief Executive Officer James B. O'Brien 46 President Kevin P. Coyle 44 Vice President of Finance Elizabeth M. Steele 44 Vice President and Secretary
Mr. Glenn R. Jones has been Chairman of the Board of the Managing General Partner since its formation in October 1986. Mr. Jones served as President of the Managing General Partner until September of 1990 at which time he was elected Chief Executive Officer. Mr. Jones has served as Chairman of the Board of Directors and Chief Executive Officer of Jones Intercable, Inc. since its formation in 1970, and he was President from June 1984 until April 1988. Mr. Jones is the sole shareholder, President and Chairman of the Board of Directors of Jones International, Ltd. He is also Chairman of the Board of Directors of the subsidiaries of Jones Intercable, Inc. and of certain other affiliates of Jones Intercable, Inc. 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 and the Executive Committee of the National Cable Television Association. He also is on the Executive Committee of Cable in the Classroom, an organization dedicated to education via cable. Additionally, in March 1991, Mr. Jones was appointed to the Board of Governors for the American Society for Training and Development, and in November 1992 to the Board of Education Council of the National Alliance of Business. Mr. Jones is also a founding member of the James Madison Council of the Library of Congress. Mr. Jones 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; the Women in Cable Accolade in 1990 in recognition of support of this organization; the Most Outstanding Corporate Individual Achievement award from the International Distance Learning Conference; the Golden Plate Award from the American Academy of Achievement for his advances in distance education; the Man of the Year named by the Denver chapter of the Achievement Rewards for College Scientists; and in 1994 Mr. Jones was inducted into Broadcasting and Cable's Hall of Fame. Mr. James B. O'Brien was elected President of the Managing General Partner in September of 1990. Mr. O'Brien joined Jones Intercable, Inc. in January 1982. Mr. O'Brien was elected President and a Director of Jones Intercable, Inc. in December 1989. Prior to being elected President and a Director of Jones Intercable, Inc., Mr. O'Brien served as a Division Manager, Director of Operations Planning/Assistant to the CEO, Fund Vice President and Group Vice President/Operations. As President, he is responsible for the day-to-day operations of the cable television systems managed and owned by Jones Intercable, Inc. Mr. O'Brien is a board member of Cable Labs, Inc., the research arm of the cable television industry. He also serves as a director of the Cable Television Administration and Marketing Association and as a director of the Walter Kaitz Foundation, a 36 37 foundation that places people of any ethnic minority group in positions with cable television systems, networks and vendor companies. Mr. Kevin P. Coyle was elected Vice President of Finance of the Managing General Partner in February 1989. Mr. Coyle is the principal financial and accounting officer of the Managing General Partner. Mr. Coyle joined The Jones Group, Ltd. in July 1981 as Vice President/Financial Services. He was elected Treasurer of Jones Intercable, Inc. in August 1987, Vice President/Treasurer in April 1988 and Group Vice President/Finance in October 1990. Ms. Elizabeth M. Steele has served as Secretary of the Managing General Partner since August 1987 and Vice President since February 1989. Ms. Steele joined Jones Intercable, Inc. in August 1987 as Vice President/General Counsel and Secretary. From August 1980 until joining Jones Intercable, Inc., Ms. Steele was an associate and then a partner at the Denver law firm of Davis, Graham & Stubbs, which serves as counsel to Jones Intercable, Inc. Certain information concerning directors and executive officers of the Supervising General Partner is set forth below:
Name Age Positions with the Supervising General Partner ---- --- ---------------------------------------------- Janis E. Miller 44 President and Director Morris Goodwin, Jr. 44 Vice President, Treasurer and Director Lori J. Larson 37 Vice President and Director Ronald W. Powell 51 Vice President Bradley C. Nelson 31 Vice President John M. Knight 43 Vice President
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 American Express Financial Corporation law department since 1975. 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. Knight joined American Express Financial Corporation in July 1975. He is currently Controller-Variable Assets and charged with the overall finance responsibilities for Mutual Funds, Limited 37 38 Partnerships, Variable Annuities and Wealth Management Services. From 1981 to March 1994, he held a number of positions in the IDS Certificate Company, leading to Controller of that organization. ITEM 11. EXECUTIVE COMPENSATION The Partnership has no employees; however, various personnel are required to operate cable television systems owned by the Venture. Such personnel are employed by Intercable and, pursuant to the terms of the Partnership's limited partnership agreement, the cost of such employment is charged by the Managing General Partner to the Partnership as a direct reimbursement item. See Item 13. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS 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 the Partnership a management fee, and the Partnership reimburses Intercable, the parent of the Managing General Partner, for certain allocated overhead and administrative expenses. These expenses represent the salaries and benefits paid to corporate personnel, rent, data processing services and other facilities costs. Such personnel provide engineering, marketing, administrative, accounting, legal and investor relations services to the Partnership. Allocations of personnel costs are based primarily on actual time spent by employees with respect to each partnership managed. Remaining expenses are allocated based on the pro rata relationship of the Partnership's revenues to the total revenues of all systems owned or managed by Intercable or its affiliates. Systems owned by Intercable and all other systems owned by partnerships for which Intercable serves as general partner, are also allocated a proportionate share of these expenses. The Supervising General Partner, IDS Cable Corporation, charges the Partnership for supervision fees in accordance with the limited partnership agreement of the Partnership. Intercable, the parent of the Managing General Partner, also advances funds and charges interest on the balance payable. The interest rate charged approximates Intercable's weighted average cost of borrowing. 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 38 39 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 shared two-thirds and one-third between PIN and the Venture. During the year ended December 31, 1995, the Venture received revenues from PIN of $29,347. The activities of the Partnership are limited to its equity ownership in the Venture. The charges to the Venture for related party transactions are as follows for the periods indicated:
IDS/Jones Joint Venture Partners At December 31, - -------------------------------- ---------------------------------------------- 1995 1994 1993 ---- ---- ---- Management fees $ 843,045 $769,424 $759,803 Supervision fees 84,305 76,942 75,980 Allocation of expenses 1,218,491 1,173,804 1,183,224 Interest expense and advances and loans from the Managing General Partner and Intercable 481,211 386,257 258,399 Interest expense re loan from IDS Management Corporation 120,970 113,458 65,653 Amount of notes and advances outstanding 331,185 933,949 1,056,828 Highest amount of notes and advances outstanding 331,185 1,040,406 1,056,828 Programming fees: Superaudio 23,928 23,558 22,627 Mind Extension University 25,603 21,347 13,168 Jones Computer Network 51,138 12,421 -0-
39 40 PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)1. See index to financial statements for list of financial statements and exhibits thereto filed as part of this report. 3. The following exhibits are filed herewith: 4.1 Limited Partnership Agreement for IDS/Jones Growth Partners 89-B, Ltd. (1) 10.1.1 Copy of franchise and related documents granting a cable television system franchise for the City of Aurora, Illinois. (1) 10.1.2 Copy of franchise and related documents granting a cable television system franchise for Kane County, Illinois. (2) 10.1.3 Resolution No. 91-49 dated March 12, 1991 of Kane County extending the term of the franchise. (2) 10.1.4 Franchise Extension Agreement dated March 29, 1991 of Kane County extending the term of the franchise. (2) 10.1.5 Resolution No. 92-54 dated March 12, 1991 of Kane County extending the term of the franchise. (2) 10.1.6 Ordinance No. 92-133 dated June 9, 1992 of Kane County renewing the franchise. (2) 10.1.7 Copy of franchise and related documents granting a cable television system franchise for Kendall County, Illinois. (1) 10.1.8 Copy of franchise and related documents granting a cable television system franchise for the Village of Montgomery, Illinois. (1) 10.1.9 Copy of franchise and related documents granting a cable television system franchise for the Village of North Aurora, Illinois. (1) 10.1.10 Copy of franchise and related documents granting a cable television system franchise for the Village of Oswego, Illinois. (1) 10.1.11 Copy of franchise and related documents granting a cable television system franchise for the City of Plano, Illinois. (1) 10.1.12 Copy of franchise and related documents granting a cable television system franchise for the City of Sandwich, Illinois. (1) 10.1.12 Copy of franchise and related documents granting a cable television system franchise for the Village of Yorkville, Illinois. (1) 10.2.1 Credit Agreement dated as of November 3, 1994 among the Venture, IDS/Jones 89-B, Growth Partners II and Shawmut Bank Connecticut, N.A., as agent for various lenders. (4) 40 41 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 89-B, Ltd. (Commission File No. 0-17734) for fiscal year ended December 31, 1994 (b) Reports on Form 8-K None. 41 42 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 25, 1996 Chief Executive Officer By IDS Cable Corporation, their Supervising General Partner By: /s/ JANIS E. MILLER ---------------------------------- Janis E. Miller Dated: March 25, 1996 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 25, 1996 (Principal Executive Officer) By: /s/ KEVIN P. COYLE ---------------------------------- Kevin P. Coyle Vice President/Finance (Principal Financial and Dated: March 25, 1996 Accounting Officer) 42 43 OFFICERS AND DIRECTORS OF IDS CABLE CORPORATION: By: /s/ JANIS E. MILLER ----------------------------------- Janis E. Miller President and Director Dated: March 25, 1996 (Principal Executive Officer) By: /s/ MORRIS GOODWIN, JR. ----------------------------------- Morris Goodwin, Jr. Vice President, Treasurer and Director (Principal Financial and Dated: March 25, 1996 Accounting Officer) By: /s/ LORI J. LARSON ----------------------------------- Lori J. Larson Dated: March 25, 1996 Vice President and Director 43 44 EXHIBIT INDEX
Exhibit Number Exhibit Description 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. (1) 10.1.2 Copy of franchise and related documents granting a cable television system franchise for Kane County, Illinois. (2) 10.1.3 Resolution No. 91-49 dated March 12, 1991 of Kane County extending the term of the franchise. (2) 10.1.4 Franchise Extension Agreement dated March 29, 1991 of Kane County extending the term of the franchise. (2) 10.1.5 Resolution No. 92-54 dated March 12, 1991 of Kane County extending the term of the franchise. (2) 10.1.6 Ordinance No. 92-133 dated June 9, 1992 of Kane County renewing the franchise. (2) 10.1.7 Copy of franchise and related documents granting a cable television system franchise for Kendall County, Illinois. (1) 10.1.8 Copy of franchise and related documents granting a cable television system franchise for the Village of Montgomery, Illinois. (1) 10.1.9 Copy of franchise and related documents granting a cable television system franchise for the Village of North Aurora, Illinois. (1) 10.1.10 Copy of franchise and related documents granting a cable television system franchise for the Village of Oswego, Illinois. (1) 10.1.11 Copy of franchise and related documents granting a cable television system franchise for the City of Plano, Illinois. (1) 10.1.12 Copy of franchise and related documents granting a cable television system franchise for the City of Sandwich, Illinois. (1) 10.1.12 Copy of franchise and related documents granting a cable television system franchise for the Village of Yorkville, Illinois. (1) 10.2.1 Credit Agreement dated as of November 3, 1994 among the Venture, IDS/Jones 89-B, Growth Partners II and Shawmut Bank Connecticut, N.A., as agent for various lenders. (4)
45
Exhibit Number Exhibit Description 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 89-B, Ltd. (Commission File No. 0-17734) for fiscal year ended December 31, 1994
EX-27 2 FINANCIAL DATA SCHEDULE
5 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 0 0 0 0 0 0 0 0 0 1,452,127 0 0 0 0 (1,512,127) 0 0 0 0 0 2,237,773 0 0 (2,237,773) 0 (2,237,773) 0 0 0 (2,237,773) (34.95) (34.95)
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