<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 June 30, 1999.
-------------
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____ to _____.
Commission file number: 0-17734
IDS/JONES GROWTH PARTNERS 89-B, LTD.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in its charter
Colorado 84-1060546
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D. #
c/o Comcast Corporation
1500 Market Street, Philadelphia, PA 19102-2148
-----------------------------------------------
Address of principal executive office
(215) 665-1700
-----------------------------
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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IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
------ ------------ ------------
<S> <C> <C>
Investment in cable television joint venture $ 356,885 $ 413,687
------------ ------------
Total assets $ 356,885 $ 413,687
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 8,608 $ -
------------ ------------
Total liabilities 8,608 -
------------ ------------
PARTNERS' CAPITAL:
General Partners-
Contributed capital 500 500
Accumulated deficit (500) (500)
------------ ------------
- -
------------ ------------
Limited Partners-
Contributed capital (63,383 units
outstanding at June 30, 1999 and
December 31, 1998) 12,623,901 12,623,901
Distributions (12,447,247) (12,447,247)
Accumulated earnings 171,623 237,033
------------ ------------
348,277 413,687
------------ ------------
Total liabilities and partners' capital $ 356,885 $ 413,687
============ ============
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited balance sheets.
2
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OTHER EXPENSE $ (8,608) $ - $ (8,608) $ -
EQUITY IN NET INCOME (LOSS)
OF CABLE TELEVISION
JOINT VENTURE 28,221 (304,773) (56,802) (576,224)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 19,613 $(304,773) $ (65,410) $(576,224)
========= ========= ========= =========
ALLOCATION OF NET INCOME (LOSS):
General Partners $ - $ (3,047) $ - $ (5,762)
========= ========= ========= =========
Limited Partners $ 19,613 $(301,726) $ (65,410) $(570,462)
========= ========= ========= =========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ .31 $ (4.76) $ (1.03) $ (9.00)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 63,383 63,383 63,383 63,383
========= ========= ========= =========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
3
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
UNAUDITED STATEMENTS OF CASH FLOWS
----------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
-------------------------
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (65,410) $ (576,224)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Equity in net loss of Cable Television
Joint Venture 56,802 576,224
Increase in accounts payable and accrued liabilities 8,608 -
---------- ----------
Net cash provided by operating activities - -
---------- ----------
Net change in cash - -
Cash, beginning of period - -
---------- ----------
Cash, end of period $ - $ -
========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ -
========== ==========
</TABLE>
The accompanying notes to unaudited financial statements
are an integral part of these unaudited statements.
4
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
(A Limited Partnership)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the 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 only of normal recurring accruals,
necessary to present fairly the financial position of IDS/Jones Growth Partners
89-B, Ltd. (the "Partnership") at June 30, 1999 and December 31, 1998 and its
Statements of Operations for the three and six month periods ended June 30, 1999
and 1998 and its Statements of Cash Flows for the six month periods ended June
30, 1999 and 1998.
The Partnership owns a 24.4 percent interest in IDS/Jones Joint Venture
Partners (the "Venture") through a capital contribution of $14,008,000 made in
1990. The Venture acquired 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") on May 31, 1990. As discussed below, the Venture
sold the Aurora System on December 4, 1998. Jones Cable Corporation, a Colorado
corporation, is the "Managing General Partner."
The Partnership's investment in the Venture is accounted for using the
equity method. At June 30, 1999, the Partnership had recorded an investment in
the Venture of $356,885.
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in Jones Intercable, Inc. ("Intercable"). As of
April 7, 1999, Comcast owned approximately 12.8 million shares of Intercable's
Class A Common Stock and approximately 2.9 million shares of Intercable's Common
Stock, representing approximately 37% of the economic interest and 47% of the
voting interest in Intercable. Also on that date, Comcast contributed its shares
in Intercable to Comcast's wholly owned subsidiary, Comcast Cable
Communications, Inc. ("Comcast Cable"). The approximately 2.9 million shares of
Common Stock of Intercable owned by Comcast represents approximately 57% of the
outstanding Common Stock, which class of stock is entitled to elect 75% of the
Board of Directors of Intercable. As a result of this transaction, Intercable is
now a consolidated public company subsidiary of Comcast Cable.
Also on April 7, 1999, the bylaws of Intercable were amended to establish
the size of Intercable's Board of Directors as a range from eight to thirteen
directors and the board was reconstituted so as to have eight directors and the
following directors of Intercable resigned: Robert E. Cole, Josef J. Fridman,
James J. Krejci, James B. O'Brien, Raphael M. Solot, Robert Kearney, Howard O.
Thrall, Siim Vanaselja, Sanford Zisman and Glenn R. Jones. In addition, Donald
L. Jacobs resigned as a director elected by the holders of Class A Common Stock
and was elected by the remaining directors as a director elected by the holders
of Common Stock. The remaining directors elected the following persons to fill
the vacancies on the board created by such resignations: Ralph J. Roberts,
Brian L. Roberts, John R. Alchin, Stanley Wang and Lawrence S. Smith. All of
the newly elected directors, with the exception of Mr. Jacobs, are officers of
Comcast. Also on April 7, 1999, the following executive officers of Intercable
resigned: Glenn R. Jones, James B. O'Brien, Ruth E. Warren, Kevin P. Coyle,
Cynthia A. Winning, Elizabeth M. Steele, Wayne H. Davis and Larry W. Kaschinske.
The following persons were appointed as executive officers of Intercable on
April 7, 1999: Ralph J. Roberts, Brian L. Roberts, Lawrence S. Smith, John R.
Alchin and Stanley Wang.
Comcast is principally engaged in the development, management and operation
of broadband cable networks and in the provision of content through programming
investments. Comcast Cable is principally engaged in the development,
management and operation of broadband cable networks. The address of Comcast's
principal office is 1500 Market Street, Philadelphia, Pennsylvania 19102-2148,
which is also now the address of the principal office of Intercable and of the
Managing General Partner. The address of Comcast Cable's principal office is
1201 Market Street, Suite 2201, Wilmington, Delaware 19801.
(2) On December 4, 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. The Venture
repaid all of its indebtedness, settled working capital adjustments, deposited
$3,283,500 into an interest-bearing indemnity escrow account and distributed
remaining net sales proceeds of $51,374,610 to its four partners. The
Partnership received $12,549,640, or 24.4 percent, of the $51,374,610
distribution. The Partnership in turn paid its remaining liabilities totaling
$102,373 and then it distributed the remaining balance of $12,447,247 to its
limited partners.
The $3,283,500 of the sale proceeds placed in the interest-bearing
indemnity escrow account will remain in escrow until November 15, 1999 as
security for the Venture's agreement to indemnify the buyer under the asset
purchase agreement. The Venture's primary exposure, if any, will relate to the
representations and warranties made about the Aurora System in the asset
purchase agreement. Any amounts remaining from this interest-bearing indemnity
escrow account and not claimed by the buyer at the end of the escrow period,
plus interest earned on escrowed funds, will be returned to the Venture. From
this amount, the Venture will pay its remaining liabilities, which totaled
$1,906,550 at June 30, 1999, and then the Venture will distribute the remaining
balance, if any, to its four partners. From its share of this amount, the
Partnership will retain funds necessary to cover the administrative expenses of
the Partnership and it will then distribute the balance, if any, to the limited
partners. The Partnership and the Venture will continue in existence at least
until any amounts remaining from the interest-bearing indemnity escrow account
have been distributed.
(3) The Managing General Partner manages the Partnership and the Venture and
received a fee for its services equal to 5 percent of the gross revenues of the
Aurora System, excluding revenues from the sale of cable television systems or
franchises, until its sale on December 4, 1998. The Managing General Partner
has not received and will not receive a management fee after December 4, 1998.
Management fees paid during the three and six month periods ended June 30, 1998
(reflecting the Partnership's 24.4 percent interest in the Venture) were $66,906
and $129,589, respectively.
IDS Cable Corporation (the "Supervising General Partner") participated
in certain management decisions of the Partnership and received a fee for its
services equal to 1/2 percent of the Partnership's portion of the gross revenues
of the Aurora System, excluding revenues from the sale of cable television
systems or franchises. The Supervising General Partner has not received and will
not receive a supervision fee after December 4, 1998. Supervision fees paid
during the three and six month periods ended June 30, 1998 (reflecting the
Partnership's 24.4 percent interest in the Venture) were $6,690 and $12,959,
respectively.
5
<PAGE>
The Venture will continue to reimburse Jones Intercable, Inc., the
parent of the Managing General Partner, 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 Venture. Such services, and their related
costs, are necessary to the administration of the Venture. Reimbursements made
to Jones Intercable, Inc. by the Venture for overhead and administrative
expenses during the three and six month periods ended June 30, 1999 (reflecting
the Partnership's 24.4 percent interest in the Venture) were $2,609 and $3,857,
respectively, as compared to $80,409 and $152,352, respectively, for the three
and six month periods ended June 30, 1998.
The Supervising General Partner may also be reimbursed for certain
expenses incurred on behalf of the Venture. There were no reimbursements made to
the Supervising General Partner during the three and six month periods ended
June 30, 1999 and 1998.
6
<PAGE>
(4) Financial information regarding the Venture is presented below.
UNAUDITED BALANCE SHEETS
------------------------
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
ASSETS
------
Proceeds from sale in escrow $ 3,369,692 $ 3,283,500
----------- -----------
Total assets $ 3,369,692 $ 3,283,500
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Accounts payable and accrued liabilities $ 1,907,050 $ 1,588,062
Partners' contributed capital 57,344,709 57,344,709
Distributions (51,374,610) (51,374,610)
Accumulated deficit (4,507,457) (4,274,661)
----------- -----------
Total liabilities and partners' capital $ 3,369,692 $ 3,283,500
=========== ===========
</TABLE>
UNAUDITED STATEMENTS OF OPERATIONS
----------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
----------------------------- ----------------------------
1999 1998 1999 1998
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Revenues $ - $ 5,484,098 $ - $10,622,039
Operating expenses - 2,977,427 - 5,757,426
Management and supervision fees and allocated
overhead from General Partners - 631,168 - 1,208,607
Depreciation and amortization - 2,160,854 - 4,105,942
---------- ----------- --------- -----------
Operating loss - (285,351) - (449,936)
---------- ----------- --------- -----------
Interest expense (24,839) (949,601) (56,879) (1,894,764)
Interest income on escrowed proceeds 36,939 - 86,192 -
Other, net 103,560 (14,120) (262,109) (16,876)
---------- ----------- --------- -----------
Net income (loss) $ 115,660 $ (1,249,072) $(232,796) $(2,361,576)
========== =========== ========= ===========
</TABLE>
The Venture has not paid any management fees or supervision fees since
the sale of the Aurora System on December 4, 1998. Management fees paid to the
Managing General Partner by the Venture totaled $274,205 and $531,102,
respectively, for the three and six months ended June 30, 1998. Supervision fees
paid to the Supervising General Partner totaled $27,420 and $53,110,
respectively, for the three and six months ended June 30, 1998. Reimbursements
for overhead and administrative expenses paid to Jones Intercable, Inc. totaled
$10,694 and $15,808, respectively, for the three and six months ended June 30,
1999 compared to $329,543 and $624,395, respectively, for the comparable 1998
periods.
7
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership owns a 24.4 percent interest in the Venture. The
Venture owned the Aurora System until its sale on December 4, 1998. The
Partnership's investment in the Venture is accounted for under the equity
method. The Partnership's investment in the Venture decreased by $56,802, which
represents the Partnership's share of losses generated by the Venture during the
six months ended June 30, 1999.
On December 4, 1998, the Venture sold the Aurora System, its only
operating asset, to an unaffiliated party for a sales price of $108,500,000. The
Venture repaid all of its indebtedness, settled working capital adjustments,
deposited $3,283,500 into an interest-bearing indemnity escrow account and
distributed remaining net sales proceeds of $51,374,610 to its four partners.
The Partnership received $12,549,640, or 24.4 percent, of the $51,374,610
distribution. The Partnership in turn paid its remaining liabilities totaling
$102,393 and then it distributed the remaining balance of $12,447,247 to its
limited partners.
The $3,283,500 of the sale proceeds placed in the interest-bearing
indemnity escrow account will remain in escrow until November 15, 1999 as
security for the Venture's agreement to indemnify the buyer under the asset
purchase agreement. The Venture's primary exposure, if any, will relate to the
representations and warranties made about the Aurora System in the asset
purchase agreement. Any amounts remaining from this interest-bearing indemnity
escrow account and not claimed by the buyer at the end of the escrow period,
plus interest earned on escrowed funds, will be returned to the Venture. From
this amount, the Venture will pay its remaining liabilities, which totaled
$1,906,550 at June 30, 1999, and then the Venture will distribute the remaining
balance, if any, to its four partners. From its share of this amount, the
Partnership will retain funds necessary to cover the administrative expenses of
the Partnership and it will then distribute the balance, if any, to the limited
partners. The Partnership and the Venture will continue in existence at least
until any amounts remaining from the interest-bearing indemnity escrow account
have been distributed.
Because the Venture has sold all of its assets and further
distributions, if any, will be made to the limited partners of record as of the
closing date of the sale of the Venture's last remaining cable television
system, new limited partners would not be entitled to any distributions from the
Partnership and 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
- ---------------------
The Venture sold its Aurora System on December 4, 1998 and ceased
operations as of such date. Because the Aurora System was the Venture's only
operating asset, a discussion of results of operations would not be meaningful.
The Venture incurred other expenses totaling $262,109 in the first six months of
1999, which related to various costs associated with the sale of the Aurora
System. The Venture and the Partnership will be liquidated and dissolved upon
the final distribution of any amounts remaining from the interest-bearing
indemnity escrow account.
8
<PAGE>
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
Report on Form 8-K dated April 7, 1999, filed on April 15,
1999, reported that on April 7, 1999, Comcast Corporation completed
the acquisition of a controlling interest in Jones Intercable,
Inc., the parent of the Managing General Partner.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IDS/JONES GROWTH PARTNERS 89-B, LTD.
BY: JONES CABLE CORPORATION,
its Managing General Partner
By: /S/ Lawrence S. Smith
----------------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
----------------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: August 16, 1999
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 356,885
<CURRENT-LIABILITIES> 8,608
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 348,277
<TOTAL-LIABILITY-AND-EQUITY> 356,885
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 65,410
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (65,410)
<INCOME-TAX> 0
<INCOME-CONTINUING> (65,410)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (65,410)
<EPS-BASIC> (1.03)
<EPS-DILUTED> (1.03)
</TABLE>
