<PAGE>
FORM 10-K
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 For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission file number: 0-16939
JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1069504
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State of Organization (IRS Employer
Identification No.)
<TABLE>
<CAPTION>
<S> <C>
c/o Comcast Corporation, 1500 Market Street,
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Philadelphia, Pennsylvania 19102-2148 (215) 665-1700
- ------------------------------------- --------------
(Address of principal executive office and Zip Code) (Registrant's telephone no. including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests
</TABLE>
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
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State the aggregate market value of the voting stock held by non-affiliates of
the registrant: [Not applicable]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.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.
-----------
DOCUMENTS INCORPORATED BY REFERENCE: None
(50061)
<PAGE>
This Annual Report on Form 10-K is for the year ending December 31,
1999. This Annual Report modifies and supersedes documents filed by the
Partnership prior to the filing of this Annual Report. The Securities and
Exchange Commission (the "SEC") allows the Partnership to "incorporate by
reference" into this Annual Report information that it files with the SEC, which
means that the Partnership can disclose important information to limited
partners by referring them directly to those documents. Information incorporated
by reference is considered to be part of this Annual Report. In addition,
information that the Partnership files with the SEC in the future will
automatically update and supersede information contained in this Annual Report.
Certain information contained in this Annual Report contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts, included in
this Annual Report that address activities, events or developments that the
Partnership or the General Partner expects, believes or anticipates will or may
occur in the future are forward-looking statements. These forward-looking
statements are based upon certain assumptions and are subject to risks and
uncertainties. Actual events or results may differ from those discussed in the
forward-looking statements as a result of various factors.
PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. Jones Spacelink Income/Growth Fund 1-A, Ltd. (the
"Partnership") is a Colorado limited partnership. Comcast JOIN Holdings, Inc., a
Delaware corporation, is the general partner of the Partnership (the "General
Partner"). The Partnership was formed for the purpose of acquiring and operating
cable television systems. The Partnership owned the cable television systems
serving the areas in and around the communities of Bluffton, Decatur, Monroe,
Auburn, Butler, Uniondale, Waterloo, Poneto, Vera Cruz and Garrett and certain
unincorporated areas of Wells, Allen, Noble, Adams and DeKalb Counties, all in
the State of Indiana (the "Northeast Indiana Systems") until they were sold on
June 30, 1998. Although the sale of the Northeast Indiana Systems represented
the sale of the only remaining operating asset of the Partnership, the
Partnership will not be dissolved until the pending litigation in which the
Partnership is a named defendant has been resolved and terminated.
NEW GENERAL PARTNER. On April 7, 1999, Comcast Corporation ("Comcast")
completed the acquisition of a controlling interest in Jones Intercable, Inc.
("Jones Intercable"), the Partnership's general partner until March 2, 2000, as
discussed below. As of December 31, 1999, Comcast owned approximately 2.9
million shares of Jones Intercable's Common Stock and approximately 13.8 million
shares of Jones Intercable's Class A Common Stock, representing 39.6% of the
economic interest and 48.3% of the voting interest in Jones Intercable. Comcast
contributed its shares in Jones Intercable to its wholly owned subsidiary,
Comcast Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9
million shares of Common Stock of Jones Intercable owned by Comcast Cable
represented shares having the right to elect approximately 75% of the Board of
Directors of Jones Intercable. As of April 7, 1999, Jones Intercable became a
consolidated public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On
2
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March 2, 2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a
wholly owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. References in this Annual Report to "the General
Partner" refer to Comcast JOIN Holdings, Inc. The General Partner shares
corporate offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
DISPOSITION OF CABLE TELEVISION SYSTEM. On June 30, 1998, the
Partnership sold its Northeast Indiana Systems to an unaffiliated party for a
sales price of $23,500,000. From the sale proceeds, the Partnership repaid all
of its indebtedness, settled working capital adjustments, deposited $1,000,000
into an interest-bearing indemnity escrow account and distributed the remaining
net sale proceeds in August 1998 to its limited partners of record as of June
30, 1998. The distribution from the sale of the Northeast Indiana Systems
provided the Partnership's limited partners, as a group, with $14,915,500, or an
approximate return of $291 for each $500 limited partnership interest, or $582
for each $1,000 invested in the Partnership. The sale of the Northeast Indiana
Systems was approved by the holders of a majority of the limited partnership
interests in the Partnership.
Taking into account prior distributions to limited partners from the
Partnership's operating cash flow and from the net proceeds of prior system
sales and the sale of the Northeast Indiana Systems, the limited partners of the
Partnership have received a total return of $589 for each $500 limited
partnership interest, or $1,178 for each $1,000 invested in the Partnership.
For a period following the closing date of June 30, 1998, $1,000,000 of
the sale proceeds remained in escrow as security for the Partnership's agreement
to indemnify the buyer under the asset purchase agreement. The escrow period has
expired and the escrowed funds plus interest were returned in October 1999
because no claims were made on the escrowed funds by the buyer. From the
escrowed funds, the Partnership repaid its remaining liabilities and it will
hold the balance in reserve to cover the administrative expenses of the
Partnership until the Partnership is liquidated and dissolved.
Because transferees of limited partnership interests following the
record date for the distribution of the proceeds from the sale of the Northeast
Indiana Systems (June 30, 1998) would not be entitled to any distributions from
the Partnership, a transfer of limited partnership interests following such
record date would have no economic value. The General Partner therefore has
determined that, pursuant to the authority granted to it by the Partnership's
limited partnership agreement, the General Partner will approve no transfers of
limited partnership interests after June 30, 1998.
ITEM 2. PROPERTIES
------------------
As of December 31, 1999, the Partnership does not own any cable
television systems.
ITEM 3. LEGAL PROCEEDINGS
-------------------------
In July 1999, Jones Intercable, each of its subsidiaries that serve as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest Properties,
------------------------------------------------
LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs v. Jones
- ----------------------------------------------------------------------------
Intercable, Inc., et al., defendants (Superior Court, Los Angeles County, State
- ------------------------------------
of California, Case No. BC 213632).
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied covenant of good faith and fair dealing
owed to the plaintiffs as limited partners, a
3
<PAGE>
breach of Jones Intercable's fiduciary duty owed to the plaintiffs as limited
partners and tortious interference with prospective economic advantage.
Plaintiffs allege that Jones Intercable's failure to provide them with the
partnership lists prevented them from making their tender offers and that they
have been injured by such action in an amount to be proved at trial, but not
less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs leave to amend their complaint to attempt to cure the deficiencies in
the pleadings. The plaintiffs filed their first amended complaint in January
2000.
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. The General Partner believes that the defendants
have defenses to the plaintiffs' claims for relief and challenges to the
plaintiffs' claims for damages, and the General Partner intends to defend this
lawsuit vigorously.
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 December 31, 1999, the number of equity security
holders in the Partnership was 2,152.
4
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ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Jones Spacelink Income/Growth Fund 1-A, Ltd. For the Year Ended December 31,
- ----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues -- $ 2,919,556 $ 5,522,807 $ 5,724,538 $ 6,838,837
Depreciation and Amortization -- 893,029 1,680,105 1,930,748 3,161,861
Operating Income (Loss) -- (49,096) 396,470 (110,944) (630,272)
Net Income (Loss) 76,543 12,794,204(a) (281,375) 3,711,661(b) (1,495,469)
Net Income (Loss) per
Limited Partnership Unit 1.49 249.18(a) (5.43) 69.26(b) (28.87)
Weighted Average Number of Limited
Partnership Units Outstanding 51,276 51,276 51,276 51,276 51,276
General Partner's Deficit -- -- (17,258) (14,444) (161,832)
Limited Partners' Capital 940,847 864,304 3,002,858 3,281,419 5,992,398
Total Assets 940,847 1,000,000 10,944,711 11,477,059 18,237,340
Credit Facility and Capitalized
Lease Obligations -- -- 7,620,042 7,467,645 11,605,582
</TABLE>
(a) Net income resulted primarily from the sale of the Northeast Indiana
Systems by Jones Spacelink Income/Growth Fund 1-A, Ltd. in June 1998.
(b) Net income resulted primarily from the sale of the Lake Geneva and Ripon
Systems by Jones Spacelink Income/Growth Fund 1-A, Ltd. in April 1996.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains, in addition to historical
information, forward-looking statements that are based upon certain assumptions
and are subject to a number of risks and uncertainties.
FINANCIAL CONDITION
The Partnership sold the Northeast Indiana Systems, its only remaining
operating assets, in 1998. From the sale proceeds, the Partnership repaid all of
its indebtedness, settled working capital adjustments, deposited $1,000,000 into
an interest-bearing indemnity escrow account and distributed remaining net sale
proceeds to its limited partners.
For a period following the closing date, $1,000,000 of the sale
proceeds remained in escrow as security for the Partnership's agreement to
indemnify the buyer under the asset purchase agreement. The escrow period has
expired and the escrowed funds plus interest, which totaled $1,058,797, were
returned in October 1999 because no claims were made on the escrowed funds by
the buyer. From the escrowed funds, the Partnership repaid its remaining
liabilities and it will retain the balance to cover the continuing
administrative expenses of the Partnership until the Partnership is liquidated
and dissolved. Although the sale of the Northeast Indiana Systems represented
the sale of the only remaining operating assets of the Partnership, the
Partnership will not be dissolved until the pending litigation in which the
Partnership is a named defendant has been resolved and terminated.
RESULTS OF OPERATIONS
The Partnership conducted no operations in 1999; therefore, a
discussion of the results of operations would not be meaningful.
5
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ITEM 8. FINANCIAL STATEMENTS
The audited financial statements of the Partnership for the year ended
December 31, 1999 follow.
6
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Jones Spacelink Income/Growth Fund 1-A, Ltd.:
We have audited the accompanying balance sheets of Jones Spacelink
Income/Growth Fund 1-A, Ltd. (a Colorado limited partnership) as of December 31,
1999 and 1998, and the related statements of operations, partners' capital
(deficit) and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
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 Jones Spacelink
Income/Growth Fund 1-A, Ltd. as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1999, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 3, 2000.
7
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
ASSETS
December 31,
-----------------------
1999 1998
---------- ---------
RECEIVABLE FROM JONES INTERCABLE $ 940,847 --
PROCEEDS FROM SALE IN INTEREST-BEARING ESCROW ACCOUNT -- 1,000,000
---------- ---------
Total assets $ 940,847 $1,000,000
========== ==========
The accompanying notes to financial statements
are an integral part of these balance sheets.
8
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
LIABILITIES AND PARTNERS' CAPITAL
December 31,
----------------------------
1999 1998
------------ ------------
LIABILITIES:
Accounts payable and accrued liabilities $ -- $ 135,696
------------ ------------
Total liabilities -- 135,696
------------ ------------
COMMITMENTS AND CONTINGENCIES (NOTE 5)
PARTNERS' CAPITAL:
General Partner-
Contributed capital 1,000 1,000
Distributions (103,950) (103,950)
Accumulated earnings 102,950 102,950
------------ ------------
-- --
------------ ------------
Limited Partners-
Contributed capital, net of
related commissions, syndication
costs and interest (51,276 units
outstanding at December 31, 1999
and 1998) 21,875,852 21,875,852
Distributions (30,206,680) (30,206,680)
Accumulated earnings 9,271,675 9,195,132
------------ ------------
940,847 864,304
------------ ------------
Total partners' capital 940,847 864,304
------------ ------------
Total liabilities and partners'
capital $ 940,847 $ 1,000,000
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
9
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES $ -- $ 2,919,556 $ 5,522,807
COSTS AND EXPENSES:
Operating expenses -- 1,747,814 2,844,900
Management fees and allocated administrative
costs from Jones Intercable -- 327,809 601,332
Depreciation and amortization -- 893,029 1,680,105
------------ ------------ ------------
OPERATING INCOME (LOSS) -- (49,096) 396,470
------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense -- (288,157) (664,204)
Interest income on escrowed proceeds 58,797 -- --
Gain on sale of cable television system -- 13,106,602 --
Other, net 17,746 24,855 (13,641)
------------ ------------ ------------
Total other income (expense), net 76,543 12,843,300 (677,845)
------------ ------------ ------------
NET INCOME (LOSS) $ 76,543 $ 12,794,204 $ (281,375)
============ ============ ============
ALLOCATION OF NET INCOME (LOSS):
General Partner $ -- $ 17,258 $ (2,814)
============ ============ ============
Limited Partners $ 76,543 $ 12,776,946 $ (278,561)
============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 1.49 249.18 $ (5.43)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 51,276 51,276 51,276
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
10
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
GENERAL PARTNER:
Balance, beginning of year $ -- $ (17,258) $ (14,444)
Net income (loss) for the year -- 17,258 (2,814)
------------ ------------ ------------
Balance, end of year $ -- $ -- $ (17,258)
============ ============ ============
LIMITED PARTNERS:
Balance, beginning of year $ 864,304 $ 3,002,858 $ 3,281,419
Distribution from sale of cable television system -- (14,915,500) --
Net income (loss) for the year 76,543 12,776,946 (278,561)
------------ ------------ ------------
Balance, end of year $ 940,847 $ 864,304 $ 3,002,858
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
11
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
--------------------------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
For the Year Ended
December 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 76,543 $ 12,794,204 $ (281,375)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization -- 893,029 1,680,105
Gain on sale of cable television system -- (13,106,602) --
Decrease (increase) in trade accounts receivable, net -- 182,946 (60,942)
Increase in receivable from Jones Intercable (940,847) -- --
Decrease (increase) in deposits, prepaid expenses and other assets 1,000,000 (163,568) (91,318)
Decrease in accounts payable and accrued liabilities
and subscriber prepayments and deposits (135,696) (203,373) (87,713)
------------ ------------ ------------
Net cash provided by operating activities -- 396,636 1,158,757
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net -- (386,202) (905,705)
Proceeds from sale of cable television system, net of escrow -- 22,378,451 --
------------ ------------ ------------
Net cash provided by (used in) investing activities -- 21,992,249 (905,705)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings -- -- 687,618
Repayment of borrowings -- (7,620,042) (535,221)
Decrease in accrued distributions -- -- (315,657)
Distributions to partners -- (14,915,500) --
------------ ------------ ------------
Net cash used in financing activities -- (22,535,542) (163,260)
------------ ------------ ------------
INCREASE (DECREASE) IN CASH -- (146,657) 89,792
CASH, BEGINNING OF YEAR -- 146,657 56,865
------------ ------------ ------------
CASH, END OF YEAR $ -- $ -- $ 146,657
============ ============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ -- $ 326,494 $ 719,176
============ ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
12
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JONES SPACELINK INCOME/GROWTH FUND 1-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
Jones Spacelink Income/Growth Fund 1-A, Ltd. (the "Partnership"), a
Colorado limited partnership, was formed on May 12, 1988, pursuant to a public
offering of limited partner interests. The Partnership was formed to acquire,
construct, develop and operate cable television systems.
New General Partner
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, Inc. ("Jones
Intercable"), the Partnership's general partner until March 2, 2000, as
discussed below. As of December 31, 1999, Comcast owned approximately 2.9
million shares of Jones Intercable's Common Stock and approximately 13.8 million
shares of Jones Intercable's Class A Common Stock, representing 39.6% of the
economic interest and 48.3% of the voting interest in Jones Intercable. Comcast
contributed its shares in Jones Intercable to its wholly owned subsidiary,
Comcast Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9
million shares of Common Stock of Jones Intercable owned by Comcast Cable
represented shares having the right to elect approximately 75% of the Board of
Directors of Jones Intercable. As of April 7, 1999, Jones Intercable became a
consolidated public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Jones Intercable on April 7, 1999, all of the persons who were executive
officers of Jones Intercable as of that date terminated their employment with
Jones Intercable. Also on that date, Jones Intercable's Board of Directors
elected new executive officers, each of whom also was an officer of Comcast.
Effective April 7, 1999, Jones Intercable and Comcast entered into a management
agreement pursuant to which employees of Comcast have undertaken the
administration of the Partnership. As of July 7, 1999, all persons who were
employed at Jones Intercable's former corporate offices in Englewood, Colorado
had terminated their employment with Jones Intercable.
In December 1999, Comcast and Jones Intercable entered into a
definitive merger agreement pursuant to which Comcast agreed to acquire all of
the outstanding shares of Jones Intercable not yet owned by Comcast. On March 2,
2000, Jones Intercable was merged into Comcast JOIN Holdings, Inc., a wholly
owned subsidiary of Comcast. Comcast JOIN Holdings, Inc. continues as the
surviving corporation of the merger. As a result of this transaction, Jones
Intercable no longer exists and Comcast JOIN Holdings, Inc. is now the general
partner of the Partnership. References in this annual report to "the General
Partner" refer to Comcast JOIN Holdings, Inc. Comcast JOIN Holdings, Inc. shares
corporate offices with Comcast at 1500 Market Street, Philadelphia, Pennsylvania
19102-2148.
Cable Television System Acquisitions
In November 1988, the Partnership purchased the cable television
systems serving the areas in and around the communities of Bluffton, Decatur,
Monroe, Auburn, Butler, Uniondale, Waterloo, Poneto, Vera Cruz and Garrett, and
the unincorporated areas of Wells, Allen, Noble, Adams and DeKalb counties, all
in the State of Indiana (the "Northeast Indiana Systems"). Such systems were
sold on June 30, 1998 as discussed below.
Cable Television System Sales
On June 30, 1998, the Partnership sold its Northeast Indiana Systems to
an unaffiliated party for a sales price of $23,500,000, subject to normal
closing adjustments. From the sale proceeds, the Partnership repaid all of its
indebtedness, including the $7,500,000 borrowed under its credit facility and
capital lease obligations totaling $120,042, settled working capital
adjustments, and then deposited $1,000,000 into an interest-bearing indemnity
escrow account. The remaining net
13
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sale proceeds of $14,915,500 were distributed to its limited partners of record
as of June 30, 1998, in August 1998. The distribution from the sale of the
Northeast Indiana Systems provided the Partnership's limited partners, as a
group, $14,915,500, or an approximate return of $291 for each $500 limited
partnership interest, or $582 for each $1,000 invested in the Partnership. The
sale of the Northeast Indiana Systems was approved by the holders of a majority
of the limited partnership interests in the Partnership.
For a period following the closing date, $1,000,000 of the sale
proceeds remained in escrow as security for the Partnership's agreement to
indemnify the buyer under the asset purchase agreement. The escrow period has
expired and the escrowed funds plus interest, which totaled $1,058,797 were
returned in October 1999 because no claims were made on the escrowed funds by
the buyer. From the escrowed funds, the Partnership repaid its remaining
liabilities, and it will retain the balance to cover the continuing
administrative expenses of the Partnership until the Partnership is liquidated
and dissolved. Although the sale of the Northeast Indiana Systems represented
the sale of the only remaining operating assets of the Partnership, the
Partnership will not be dissolved until the pending litigation in which the
Partnership is a named defendant has been resolved and terminated.
Contributed Capital
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner was obligated to
make any additional contribution to Partnership capital. Jones Intercable
purchased its general partner interest in the Partnership by contributing $1,000
to partnership capital.
All profits and losses of the Partnership were allocated 99 percent to
the limited partners and one percent to Jones Intercable, except for income or
gain from the sale or disposition of cable television properties, which was
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.
(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 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.
Property, Plant and Equipment
Depreciation of property, plant and equipment was provided using the
straight-line method over the following estimated service lives:
Cable distribution systems 5 - 15 years
Equipment and tools 5 - 7 years
Office furniture and equipment 3 - 5 years
Buildings 30 years
Vehicles 3 - 4 years
Replacements, renewals and improvements were capitalized and
maintenance and repairs were charged to expense as incurred.
Property, plant and equipment and the corresponding accumulated
depreciation were written off as certain assets became fully depreciated and
were no longer in service.
14
<PAGE>
Intangible Assets
Costs assigned to intangible assets were amoritized using the
straight-line method over estimated useful lives ranging from 2 to 33 years.
Revenue Recognition
Subscriber prepayments were initially deferred and recognized as
revenue when earned.
(3) TRANSACTIONS WITH JONES INTERCABLE AND AFFILIATES
Management Fees, Distribution Ratios and Reimbursements
Jones Intercable managed the Partnership and received a fee for its
services equal to 5 percent of the gross revenues of the Partnership, excluding
revenues from the sale of cable television systems or franchises. Jones
Intercable has not received and will not receive a management fee after June 30,
1998. Management fees paid to Jones Intercable by the Partnership for the years
ended December 31, 1998 and 1997 were $145,978 and $276,140, respectively.
Any partnership distributions made from cash flow (defined as cash
receipts derived from routine operations and interest income, less debt
principal and interest payments and cash expenses) are allocated 99 percent to
the limited partners and one percent to Jones Intercable. The Partnership may
distribute any proceeds from the sale or refinancing of a cable television
system generally as follows: first, to the Partners until they have received an
amount equal to their initial capital contributions (as reduced by all prior
distributions other than distributions from cash flow); second, to the limited
partners until they have received a liquidation preference equal to 12 percent
per annum, cumulative and noncompounded, on an amount equal to their initial
capital contributions, less any portion of such capital contributions which has
been returned to the limited partners from prior sale or refinancing proceeds,
as determined for any particular year, provided that such cumulative return will
be reduced by all prior distributions of cash flow from operations and prior
distributions of proceeds of sales or refinancings of the Partnership's cable
television systems. The balance will be allocated 75 percent to the limited
partners and 25 percent to Jones Intercable.
The Partnership will continue to reimburse the general partner and
certain of its subsidiaries for certain administrative expenses. These expenses
represent the salaries and related benefits paid for corporate personnel. Such
personnel provide administrative, accounting, tax, legal, and investor relations
services to the Partnership. Such services, and their related costs, are
necessary to the administration of the Partnership until the Partnership is
dissolved. Such costs were charged to operating costs during the periods that
the Partnership operated its cable television systems. Subsequent to the sale of
the Partnership's final cable television system, such costs were charged to
other expense. Reimbursements made to Jones Intercable by the Partnership for
allocated overhead and administrative expenses were $8,500, $181,831 and
$325,192 for the years ended December 31, 1999, 1998 and 1997, respectively.
The Partnership is charged interest on amounts advanced by its general
partner and it earns interest on amounts held by its general partner on the
Partnership's behalf. The interest rate in 1999 was at an average of 7.18%,
which approximated Jones Intercable's weighted average cost of borrowing. Total
interest earned from Jones Intercable was $1,062 for the year ended December 31,
1999. Total interest charged to the Partnership by Jones Intercable was $17,600
and $2,796 for the years ended December 31, 1998 and 1997, respectively.
Payments to/from Affiliates for Programming Services
Prior to the sales of its cable television systems in 1998, the
Partnership received programming from Superaudio, Knowledge TV, Inc., Great
American Country, Inc. and Product Information Network, all of which were
affiliates of Jones Intercable, until April 7, 1999 (see Note 1).
15
<PAGE>
Payments to Superaudio by the Partnership for the years ended December
31, 1998 and 1997 totaled $5,345 and $9,775, respectively. Payments to Knowledge
TV, Inc. by the Partnership for the years ended December 31, 1998 and 1997
totaled $6,025 and $10,870, respectively. Payments to Great American Country,
Inc. totaled $5,891 and $11,313 in 1998 and 1997, respectively.
Prior to the sales of its cable television systems in 1998, the
Partnership received a commission from Product Information Network, based on a
percentage of advertising revenue and number of subscribers. Product Information
Network paid commissions to the Partnership for the years ended December 31,
1998 and 1997 totaling $12,420 and $18,248, respectively.
(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 general
partner.
The Partnership's tax returns, the qualification of the Partnership as
such for tax purposes, and the amount of distributable 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.
(5) COMMITMENTS AND CONTINGENCIES
-----------------------------
In July 1999, Jones Intercable, each of its subsidiaries that serve as
general partners of Jones Intercable's managed partnerships and most of Jones
Intercable's managed partnerships, including the Partnership, were named
defendants in a case captioned Everest Cable Investors, LLC, Everest Properties,
------------------------------------------------
LLC, Everest Properties II, LLC and KM Investments, LLC, plaintiffs v. Jones
- ----------------------------------------------------------------------------
Intercable, Inc., et al., defendants (Superior Court, Los Angeles County, State
- ------------------------------------
of California, Case No. BC 213632).
Plaintiffs allege that certain of them formed a plan to acquire up to
4.9% of the limited partnership interests in each of the managed partnerships
named as defendants, and that plaintiffs were frustrated in this purpose by
Jones Intercable's alleged refusal to provide plaintiffs with lists of the names
and addresses of the limited partners of these partnerships. The complaint
alleges that Jones Intercable's actions constituted a breach of contract, a
breach of Jones Intercable's implied covenant of good faith and fair dealing
owed to the plaintiffs as limited partners, a breach of Jones Intercable's
fiduciary duty owed to the plaintiffs as limited partners and tortious
interference with prospective economic advantage. Plaintiffs allege that Jones
Intercable's failure to provide them with the partnership lists prevented them
from making their tender offers and that they have been injured by such action
in an amount to be proved at trial, but not less than $17 million.
In September 1999, Jones Intercable and the defendant subsidiaries and
managed partnerships filed a notice of demurrers to the plaintiffs' complaint
and a hearing on this matter was held in October 1999. In December 1999, the
Court sustained the defendants' demurrers in part but the Court gave the
plaintiffs' leave to amend their complaint to attempt to cure the deficiencies
in the pleadings. The plaintiffs filed their first amended complaint in January
2000.
Discovery in the case also has begun, and Jones Intercable and the
defendant subsidiaries and managed partnerships have responded to the
plaintiffs' first set of interrogatories and the plaintiffs' first demand for
the production of documents. The General Partner believes that the defendants
have defenses to the plaintiffs' claims for relief and challenges to the
plaintiffs' claims for damages, and the General Partner intends to defend this
lawsuit vigorously.
16
<PAGE>
(6) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information for the respective years is
presented below:
Year Ended December 31,
-----------------------------
1999 1998 1997
-------- -------- --------
Maintenance and repairs $ -- $ 25,100 $ 25,266
======== ======== ========
Taxes, other than income and payroll taxes $ -- $ 27,598 $ 85,447
======== ======== ========
Advertising $ -- $ 9,717 $ 33,297
======== ======== ========
Depreciation of property, plant and equipment $ -- $521,777 $915,602
======== ======== ========
Amortization of intangible assets $ -- $371,252 $764,503
======== ======== ========
17
<PAGE>
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 General
Partner is set forth below. Directors of the General Partner serve until the
next annual meeting of the General Partner and until their successors shall be
elected and qualified.
RALPH J. ROBERTS is Chairman of the General Partner's Board of
Directors. Mr. Roberts served as Chairman of Jones Intercable, Inc.'s Board of
Directors from April 1999 until its merger with the General Partner in March
2000. Mr. Roberts has served as a director of Comcast Corporation and as the
Chairman of its Board of Directors for more than five years. Mr. Roberts has
been the President and a director of Sural Corporation, a privately held
investment company that is Comcast Corporation's controlling shareholder, for
more than five years. Mr. Roberts is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. Mr. Roberts is the father of
Brian L. Roberts. He is 80 years old.
BRIAN L. ROBERTS is President and a director of the General Partner.
Mr. Roberts served as President and a director of Jones Intercable, Inc. from
April 1999 until its merger with the General Partner in March 2000. Mr. Roberts
has served as the President and as a director of Comcast Corporation for more
than five years. Mr. Roberts also serves as Vice President and as a director of
Sural Corporation. He also is a director of Comcast Cable Communications, Inc.,
Comcast LCI Holdings, Inc., At Home Corporation and The Bank of New York
Company, Inc. Mr. Roberts is a son of Ralph J. Roberts. He is 40 years old.
LAWRENCE S. SMITH is Executive Vice President and a director of the
General Partner. Mr. Smith served as an Executive Vice President and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Smith has served as an Executive Vice President of
Comcast Corporation since December 1995. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Smith is
also a director of Comcast Cable Communications, Inc. and Comcast LCI Holdings,
Inc. He is 52 years old.
STANLEY L. WANG is Executive Vice President and Secretary and a
director of the General Partner. Mr. Wang served as Senior Vice President and
Secretary and a director of Jones Intercable, Inc. from April 1999 until its
merger with the General Partner in March 2000. Mr. Wang has served as an
Executive Vice President of Comcast Corporation since February 2000. Prior to
that time, he served as Senior Vice President of Comcast Corporation for more
than five years. Mr. Wang also has served as Secretary of Comcast Corporation
for more than five years. Mr. Wang is also a director of Comcast Cable
Communications, Inc. and Comcast LCI Holdings, Inc. He is 59 years old.
JOHN R. ALCHIN is Executive Vice President and Treasurer of the General
Partner. Mr. Alchin served as Senior Vice President and Treasurer and a director
of Jones Intercable, Inc. from April 1999 until its merger with the General
Partner in March 2000. Mr. Alchin has served as an Executive Vice President of
Comcast Corporation since February 2000. Prior to that time, he served as Senior
Vice President of Comcast Corporation for more than five years. Mr. Alchin also
has served as Treasurer of Comcast Corporation for more than five years. Mr.
Alchin is the Principal Financial Officer of the General Partner and of Comcast
Corporation. He is 51 years old.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Each of the
directors and executive officers of the General Partner were directors and
executive officers of Jones Intercable prior to its merger with the General
Partner on March 2, 2000. Jones Intercable was the general partner of the
Partnership prior to March 2, 2000. These persons became directors and executive
officers of Jones Intercable on April 7, 1999, the date
18
<PAGE>
Comcast acquired a controlling interest in Jones Intercable. These persons
failed to file on a timely basis reports disclosing their ownership of limited
partnership interests of the Partnership as required by Section 16(a) of the
Securities Exchange Act of 1934. The reports, when filed, disclosed that these
persons own no limited partnership interests of the Partnership.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to administer the financial, tax and legal affairs of the Partnership
and to maintain the books and records of the Partnership. Such personnel are
employed by Comcast and, pursuant to the terms of the limited partnership
agreement of the Partnership, the costs of such employment are charged by
Comcast to the Partnership. See ITEM 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
As of December 31, 1999, no person or entity owned more than 5% of the
limited partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership reimburses its general partner for certain allocated
overhead and administrative expenses. These expenses represent the salaries and
benefits paid to corporate personnel. Such personnel provide administrative,
tax, accounting, legal and investor relations services to the Partnership. The
Partnership will continue to reimburse its general partner for actual time spent
on Partnership business by employees of Comcast until the Partnership is
liquidated and dissolved. During the year ended December 31, 1999, such
reimbursements totaled $8,500.
The Partnership paid no management fees or brokerage fees or
programming service fees to affiliates during 1999 and it is expected that the
Partnership will never again pay management fees or brokerage fees or
programming service fees.
The Partnership is charged interest on amounts advanced by its general
partner and it earns interest on amounts held by its general partner on the
Partnership's behalf. The interest rate in 1999 was at an average of 7.18%,
which approximated Jones Intercable's weighted average cost of borrowing. During
the year ended December 31, 1999, the net effect of such interest accruals and
expense was that the Partnership earned $1,062 in interest income.
19
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. See index to financial statements for a 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 Jones Spacelink Income/Growth Fund
1-A, Ltd. (Incorporated by reference from the Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 1988.)
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
20
<PAGE>
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 in Philadelphia,
Pennsylvania.
JONES SPACELINK INCOME/
GROWTH FUND 1-A, LTD.,
a Colorado limited partnership
By: Comcast JOIN Holdings, Inc.,
a Delaware corporation, its
general partner
By: /s/ Brian L. Roberts
---------------------------
Brian L. Roberts
Dated: March 22, 2000 President; Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: /s/ Ralph J. Roberts
---------------------------
Ralph J. Roberts
Dated: March 22, 2000 Chairman; Director
By: /s/ Brian L. Roberts
---------------------------
Brian L. Roberts
President; Director
Dated: March 22, 2000 (Principal Executive Officer)
By: /s/ Lawrence S. Smith
---------------------------
Lawrence S. Smith
Dated: March 22, 2000 Executive Vice President;
Director
By: /s/ Stanley L. Wang
---------------------------
Stanley L. Wang
Dated: March 22, 2000 Executive Vice President;
Secretary; Director
By: /s/ John R. Alchin
---------------------------
John R. Alchin
Executive Vice President;
Treasurer
Dated: March 22, 2000 (Principal Financial Officer)
By: /s/ Lawrence J. Salva
---------------------------
Lawrence J. Salva
Senior Vice President
Dated: March 22, 2000 (Principal Accounting Officer)
21
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