<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1999
------------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 0-17916
JONES GROWTH PARTNERS L.P.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado 84-1143409
- --------------------------------------------------------------------------------
State of organization IRS employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
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Address of principal executive office
(215) 665-1700
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Registrant's telephone number
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
ASSETS
------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
CASH $ 155,472 $ 331,708
PROCEEDS FROM SALE IN INTEREST-BEARING
ESCROW ACCOUNT 3,200,361 --
TRADE RECEIVABLES, less allowance for doubtful
receivables of $38,122 at December 31, 1998 -- 482,555
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost -- 62,054,545
Less- accumulated depreciation -- (36,182,278)
---------- ------------
-- 25,872,267
Franchise costs and other intangible assets, net of
accumulated amortization of $68,389,364
at December 31, 1998 -- 8,866,447
---------- ------------
Total investment in cable
television properties -- 34,738,714
DEPOSITS, PREPAID EXPENSES AND OTHER ASSETS -- 410,767
---------- ------------
Total assets $3,355,833 $ 35,963,744
========== ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE>
JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
-------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
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<S> <C> <C>
LIABILITIES:
Credit facility and capital lease obligations $ -- $ 36,198,498
Accounts payable and accrued liabilities 2,028,138 3,867,487
Accrued interest -- 355,568
Subscriber prepayments -- 77,089
------------ ------------
Total liabilities 2,028,138 40,498,642
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PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 1,000 1,000
Accumulated deficit (1,000) (791,746)
------------ ------------
-- (790,746)
------------ ------------
Limited Partners-
Net contributed capital (85,740 units outstanding at
September 30, 1999 and December 31, 1998) 73,790,065 73,790,065
Distribution (60,721,037) --
Accumulated deficit (11,741,333) (77,534,217)
------------ ------------
1,327,695 (3,744,152)
------------ ------------
Total partners' capital (deficit) 1,327,695 (4,534,898)
------------ ------------
Total liabilities and partners' capital (deficit) $ 3,355,833 $ 35,963,744
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
3
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JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES $ -- $ 6,306,176 $ 3,917,788 $ 18,578,044
COSTS AND EXPENSES:
Operating expenses -- 3,796,708 2,789,496 11,234,109
Management and supervisory fees to the
General Partners and allocated administrative
costs from the Managing General Partner -- 716,512 526,712 2,150,153
Depreciation and amortization -- 1,873,028 1,300,323 5,251,058
------------ ------------ ------------ ------------
OPERATING LOSS -- (80,072) (698,743) (57,276)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (30,340) (697,723) (429,386) (1,982,953)
Interest income on escrowed proceeds 34,951 -- 81,860 --
Gain on sale of cable television system -- -- 68,379,767 --
Other, net (10,026) (23,327) (749,868) (20,030)
------------ ------------ ------------ ------------
Total other income (expense), net (5,415) (721,050) 67,282,373 (2,002,983)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (5,415) $ (801,122) $ 66,583,630 $ (2,060,259)
============ ============ ============ ============
ALLOCATION OF NET INCOME (LOSS):
Managing General Partner $ -- $ (8,011) $ 790,746 $ (20,603)
============ ============ ============ ============
Limited Partners $ (5,415) $ (793,111) $ 65,792,884 $ (2,039,656)
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (.07) $ (9.25) $ 767.35 $ (23.79)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 85,740 85,740 85,740 85,740
============ ============ ============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
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JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $66,583,630 $(2,060,259)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,300,323 5,251,058
Gain on sale of cable television system (68,379,767) -
Decrease (increase) in trade receivables 482,555 (89,420)
Increase in deposits, prepaid expenses and
other assets (3,782) (139,928)
Increase (decrease) in accounts payable, accrued
liabilities, accrued interest and subscriber prepayments (2,272,006) 878,511
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Net cash provided by (used in) operating activities (2,289,047) 3,839,962
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (640,404) (3,766,435)
Franchise costs (208,750) -
Proceeds from sale of cable television system, net of escrow 99,881,500 -
----------- -----------
Net cash provided by (used in) investing activities 99,032,346 (3,766,435)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 68,599
Repayment of borrowings (36,198,498) (66,873)
Distribution to limited partners (60,721,037) -
----------- -----------
Net cash provided by (used in) financing activities (96,919,535) 1,726
----------- -----------
Increase (decrease) in cash (176,236) 75,253
Cash, beginning of period 331,708 109,356
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Cash, end of period $ 155,472 $ 184,609
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 784,954 $ 1,988,147
=========== ===========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
5
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JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
---------------------------------------
(1) This Form 10-Q is being filed in conformity with the SEC requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a complete presentation of the Balance Sheets
and Statements of Operations and Cash Flows in conformity with generally
accepted accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position of Jones Growth Partners L.P. (the
"Partnership") at September 30, 1999 and December 31, 1998, its Statements of
Operations for the three and nine month periods ended September 30, 1999 and
1998 and its Statements of Cash Flows for the nine month periods ended September
30, 1999 and 1998. Certain prior period amounts have been reclassified to
conform to the current period presentation.
The Partnership owned the cable television system serving the
municipalities of Addison, Glen Ellyn, St. Charles, Warrenville, West Chicago,
Wheaton, Winfield and Geneva, and certain portions of unincorporated areas of Du
Page and Kane counties, all in the State of Illinois (the "Wheaton System"),
until it was sold on February 25, 1999. Jones Spacelink Cable Corporation, a
wholly owned subsidiary of Jones Intercable, Inc. ("Intercable"), a Colorado
corporation, is the "Managing General Partner."
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Intercable for aggregate consideration
of $706.3 million. Comcast acquired an additional 1.0 million shares of
Intercable's Class A Common Stock on June 29, 1999 for $50.0 million in a
private transaction. Upon completion of these transactions, Comcast owns
approximately 13.8 million shares of Intercable's Class A Common Stock and
approximately 2.9 million shares of Intercable's Common Stock, representing
39.6% of the economic interest and 48.3% of the voting interest in Intercable.
Comcast has contributed its shares in Intercable to its wholly owned subsidiary,
Comcast Cable Communications, Inc. ("Comcast Cable"). The approximately 2.9
million shares of Common Stock owned by Comcast Cable represent shares having
the right to elect approximately 75% of the Board of Directors of Intercable.
Intercable is now a consolidated public company subsidiary of Comcast Cable.
In connection with Comcast's acquisition of a controlling interest in
Intercable on April 7, 1999, all of the persons who were executive officers of
Intercable as of that date terminated their employment with Intercable.
Intercable's Board of Directors has elected new executive officers, each of whom
also is an officer of Comcast. As of July 7, 1999, all persons who were employed
at Intercable's former corporate offices in Englewood, Colorado had terminated
their employment with Intercable. Intercable's corporate offices are now located
at 1500 Market Street, Philadelphia, Pennsylvania 19102-2148.
(2) On February 25, 1999, the Partnership sold its Wheaton System to an
unaffiliated party for a sales price of $103,000,000. Upon the closing of the
sale of the Wheaton System, the Partnership repaid all of its indebtedness,
which totaled $36,183,396, settled working capital adjustments, and then
deposited $3,118,500 into an interest-bearing indemnity escrow account. The
remaining net sale proceeds, which totaled $60,721,037, were distributed to the
Partnership's limited partners of record as of February 25, 1999. This
distribution was made in March 1999. Such distribution represented an
approximate return of $708 for each $1,000 limited partnership interest. Because
limited partners did not receive distributions in an amount equal to 100 percent
of the capital initially contributed to the Partnership by the limited partners
plus an amount equal to 8 percent per annum, cumulative and noncompounded, on an
amount equal to their initial capital contributions, the Managing General
Partner and Growth Partners, Inc. (the "Associate General Partner"), an
affiliate of Lehman Brothers, Inc., did not receive general partner
distributions from the proceeds of the sale of the Wheaton System and they will
not be paid disposition fees for their services as brokers and financial
advisors in this transaction.
The $3,118,500 of the sale proceeds placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties made about the Wheaton System in the asset
purchase agreement. Any amounts remaining from this indemnity escrow account and
not claimed by the buyer at the end of the escrow period plus interest earned on
the escrowed funds will be returned to the
6
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Partnership. From this amount, the Partnership will pay its remaining
liabilities, which totaled $2,028,138 at September 30, 1999 and it will retain
the balance to cover the administrative expenses of the Partnership.
Although the sale of the Wheaton System 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.
(3) The Managing General Partner manages 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. The Managing General Partner has not received and will not receive a
management fee after February 25, 1999. Management fees paid to the Managing
General Partner by the Partnership for the three month periods ended September
30, 1999 and 1998 were $-0- and $315,309, respectively. Management fees paid to
the Managing General Partner by the Partnership for the nine month periods ended
September 30, 1999 and 1998 were $195,889 and $928,902, respectively.
The Associate General Partner has been entitled to participate with the
Managing General Partner in certain management decisions affecting the
Partnership and has received a supervisory fee of the lesser of 1 percent of the
gross revenues of the Partnership, excluding revenues from the sale of cable
television systems or franchises, or $200,000, accrued monthly and payable
annually. The Associate General Partner has not received and will not receive a
supervisory fee after February 25, 1999. Supervisory fees accrued to the
Associate General Partner by the Partnership for the three month periods ended
September 30, 1999 and 1998 were $-0- and $50,000, respectively. Supervisory
fees accrued to the Associate General Partner by the Partnership for the nine
month periods ended September 30, 1999 and 1998 were $39,178 and $150,000,
respectively. As of September 30, 1999 all supervisory fees were paid to the
Associate General Partner.
The Partnership will continue to reimburse the Managing General Partner
and certain of its affiliates for certain administrative costs. 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 system. Subsequent to the sale of
the Partnership's cable television system, such costs were charged to other
expense. Reimbursements by the Partnership to the Managing General Partner for
overhead and administrative costs for the three month periods ended September
30, 1999 and 1998 were $9,693 and $351,203, respectively. Reimbursements by the
Partnership to the Managing General Partner for overhead and administrative
costs for the nine month periods ended September 30, 1999 and 1998 were $309,739
and $1,071,251, respectively.
7
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JONES GROWTH PARTNERS L.P.
--------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
On February 25, 1999, the Partnership sold its Wheaton System to an
unaffiliated party for a sales price of $103,000,000. Upon the closing of the
sale of the Wheaton System, the Partnership repaid all of its indebtedness,
which totaled $36,183,396, settled working capital adjustments, and then
deposited $3,118,500 into an interest-bearing indemnity escrow account. The
remaining net sale proceeds, which totaled $60,721,037, were distributed to the
Partnership's limited partners of record as of February 25, 1999. This
distribution was made in March 1999. Such distribution represented an
approximate return of $708 for each $1,000 limited partnership interest. Because
limited partners did not receive distributions in an amount equal to 100 percent
of the capital initially contributed to the Partnership by the limited partners
plus an amount equal to 8 percent per annum, cumulative and noncompounded, on an
amount equal to their initial capital contributions, the Managing General
Partner and the Associate General Partner did not receive general partner
distributions from the proceeds of the sale of the Wheaton System and they will
not be paid disposition fees for their services as brokers and financial
advisors in this transaction.
The $3,118,500 of the sale proceeds placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Partnership's agreement to indemnify the buyer under the asset purchase
agreement. The Partnership's primary exposure, if any, will relate to the
representations and warranties made about the Wheaton System in the asset
purchase agreement. Any amounts remaining from this indemnity escrow account and
not claimed by the buyer at the end of the escrow period plus interest earned on
the escrowed funds will be returned to the Partnership. From this amount, the
Partnership will pay its remaining liabilities, which totaled $2,028,138 at
September 30, 1999 and it will retain the balance to cover the administrative
expenses of the Partnership.
Although the sale of the Wheaton System 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.
Because the Partnership has sold all of its assets and no further
distributions are expected to be made, transfers of limited partnership
interests would have no economic or practical value. The Managing General
Partner therefore has determined, in accordance with the authority granted to it
under Section 3.5 of the Partnership's limited partnership agreement, that it
will not process any transfers of limited partnership interests in the
Partnership during the remainder of the Partnership's term.
RESULTS OF OPERATIONS
- ---------------------
Due to the Wheaton System sale on February 25, 1999, which was the
Partnership's only operating asset, a full discussion of results of operations
would not be meaningful. For the period ended September 30, 1999, the
Partnership had total revenues of $3,917,788 and generated an operating loss of
$698,743. Because of the gain of $68,379,767 on the sale of the Wheaton System,
the Partnership realized net income of $66,583,630, or $767.35 per limited
partnership unit during the nine months ended September 30, 1999.
8
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JONES GROWTH PARTNERS L.P.
BY: JONES SPACELINK CABLE CORPORATION
Managing General Partner
By: /S/ Lawrence S. Smith
----------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
----------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: November 12, 1999
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 155,472
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,355,833
<CURRENT-LIABILITIES> 2,028,138
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,327,695
<TOTAL-LIABILITY-AND-EQUITY> 3,355,833
<SALES> 0
<TOTAL-REVENUES> 3,917,788
<CGS> 0
<TOTAL-COSTS> 4,616,531
<OTHER-EXPENSES> (67,711,759)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 429,386
<INCOME-PRETAX> 66,583,630
<INCOME-TAX> 0
<INCOME-CONTINUING> 66,583,630
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66,583,630
<EPS-BASIC> 767.35
<EPS-DILUTED> 767.35
</TABLE>
