<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: 0-17734
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Colorado 84-1060546
-------- ----------
State of Organization (IRS Employer
Identification No.)
c/o Comcast Corporation, 1500 Market Street,
- --------------------------------------------
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
--- ---
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 ((S)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
<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 Managing 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. IDS/Jones Growth Partners 89-B, Ltd. (the
"Partnership") is a Colorado limited partnership that was formed to acquire, own
and operate cable television systems in the United States. Jones Cable
Corporation, a Colorado corporation, is the managing general partner (the
"Managing General Partner") and IDS Cable Corporation, a Minnesota corporation,
is the supervising general partner (the "Supervising General Partner") of the
Partnership. The Managing General Partner is a wholly owned subsidiary of
Comcast JOIN Holdings, Inc. ("Holdings"), a Delaware corporation, which in turn
is a wholly owned subsidiary of Comcast Corporation, a Pennsylvania corporation.
The Supervising General Partner is a wholly owned subsidiary of IDS Management
Corporation, a Minnesota corporation, which in turn is a wholly owned subsidiary
of American Express Financial Corporation, a Delaware corporation.
The Partnership and IDS/Jones Growth Partners II, L.P., an affiliated
Colorado limited partnership ("Growth Partners II"), formed a Colorado general
partnership known as IDS/Jones Joint Venture Partners (the "Venture") for the
purpose of acquiring cable television systems. Jones Cable Corporation also
serves as the managing general partner of Growth Partners II. IDS Cable II
Corporation, a wholly owned subsidiary of IDS Management Corporation, which is a
wholly owned subsidiary of American Express Financial Corporation, acts as
supervising general partner of Growth Partners II. IDS Management Corporation
and Holdings each have a 5% equity interest in the Venture, the Partnership has
a 24.4% interest in the Venture, and Growth Partners II has a 65.6% interest in
the Venture.
Neither the Partnership nor the Venture currently own any cable
television system. In December 1998, the Venture sold its 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"). It is anticipated
that the Partnership will be liquidated and dissolved before the end of the year
2000.
2
<PAGE>
CHANGE IN OWNERSHIP OF THE MANAGING GENERAL PARTNER. On April 7,
1999, Comcast Corporation ("Comcast") completed the acquisition of a controlling
interest in Jones Intercable, Inc. ("Jones Intercable"), the parent of the
Managing 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 Holdings, a wholly owned subsidiary of
Comcast. Holdings continues as the surviving corporation of the merger. As a
result of this transaction, Jones Intercable no longer exists and the Managing
General Partner is now a wholly owned subsidiary of Holdings and, as such, is an
indirect wholly owned subsidiary of Comcast. The Managing General Partner and
Holdings share corporate offices with Comcast at 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
DISPOSITION OF CABLE TELEVISION SYSTEM. In December 1998, the Venture sold
the Aurora System, its only operating asset, to an unaffiliated party for a
sales price of $108,500,000. Following the sale of the Aurora System, the
Venture repaid all of its indebtedness, settled working capital adjustments,
deposited $3,283,500 into an indemnity escrow account and distributed the
remaining net sale proceeds of $51,374,610 to the Venture's four partners: the
Partnership, Growth Partners II, IDS Management Corporation and Jones
Intercable, in proportion to their ownership interests. The Partnership
received $12,549,640, or 24.4% of the $51,374,610 distribution. The
Partnership's portion of the net sale proceeds was used to repay the outstanding
balance of $102,393 due the Managing General Partner, and the remaining
$12,447,247 was distributed to the Partnership's limited partners of record as
of December 4, 1998. This distribution provided the Partnership's limited
partners an approximate return of $196 for each $250 limited partnership
interest, or $784 for each $1,000 invested in the Partnership.
The $3,283,500 of the sale proceeds placed in the interest-bearing
indemnity escrow account remained in escrow until December 14, 1999 as security
for the Venture's agreement to indemnify the buyer under the asset purchase
agreement. The escrow period has expired and the Venture received the escrowed
funds plus interest in December 1999 because no claims were made on the escrowed
funds by the buyer. From the escrowed funds, the Venture repaid its remaining
liabilities in the first quarter of 2000 and then the Venture distributed the
$1,425,209 balance to its four partners in proportion to their ownership
interests. The Partnership received $347,751, or 24.4%, of this amount. The
Partnership will hold this amount in reserve to cover the administrative
expenses of the Partnership until the Partnership is liquidated and dissolved.
If any amounts remain at the time of the Partnership's liquidation and
dissolution, such amounts would be distributed to the limited partners.
Because transferees of limited partnership interests following the
record date for the distribution of the proceeds from the sale of the Aurora
System (December 4, 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 Managing General Partner therefore has
determined that, pursuant to the authority granted to it by the
3
<PAGE>
Partnership's limited partnership agreement, the Managing General Partner will
approve no transfers of limited partnership interests after December 4, 1998.
ITEM 2. PROPERTIES
-------------------
As of December 31, 1999, neither the Partnership nor the Venture own any
cable television systems.
ITEM 3. LEGAL PROCEEDINGS
--------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
None
PART II.
--------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
------------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------
While the Partnership is publicly held, there is no public market for
the limited partnership interests, and it is not expected that a market will
develop in the future. As of December 31, 1999, the number of equity security
holders in the Partnership was 2,727.
4
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------
IDS/Jones Growth Partners 89-B, Ltd. 1999 1998 1997 1996 1995
- -------------------------------------- ----------- -------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ - $ - $ -
Depreciation and Amortization - - - - -
Operating Income - - - - -
Net Income (Loss) (77,410) 17,852,969(a) (1,495,617) (2,044,291) (2,237,773)
Net Income (Loss) per Limited
Partnership Unit (1.22) 278.69(a) (23.36) (31.93) (34.95)
Weighted Average Number of
Limited Partnership
Units Outstanding 63,383 63,383 63,383 63,383 63,383
General Partners' Deficit - - (188,653) (173,697) (153,254)
Limited Partners' Capital (Deficit) 336,277 413,687 (4,803,382) (3,322,721) (1,298,873)
Total Assets 347,629 413,687 - - -
Jones Intercable Advances 11,352 - - - -
IDS/Jones Joint Venture Partners For the Year Ended December 31,
- -------------------------------- ---------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ----------- ------------ ----------- -----------
Revenues $ - $20,456,640 $ 19,713,788 $18,394,451 $16,860,900
Depreciation and Amortization - 8,199,268 9,071,373 9,990,694 10,317,694
Operating Loss - (2,021,088) (2,378,678) (4,556,911) (5,411,813)
Net Income (Loss) (270,729) 64,747,788(a) (6,129,578) (8,378,240) (9,171,199)
Partners' Capital (Deficit) 1,424,709 1,695,438 (11,677,740) (5,548,162) 2,830,078
Total Assets 3,436,939 3,283,500 42,162,099 46,258,004 51,448,914
Debt - - 50,093,792 48,693,134 45,909,122
Jones Intercable Advances 2,012,230 666,473 343,974 398,507 331,185
</TABLE>
(a) Net income resulted primarily from the sale of the Aurora System in
December 1998 by IDS/Jones Joint Venture Partners.
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
- -------------------
IDS/Jones Growth Partners 89-B, Ltd.
- ------------------------------------
The Partnership owns a 24.4 percent interest in the Venture. The Venture
owned the Aurora System until its sale in December 1998. During 1999, the
Partnership's investment in the Venture, accounted for under the equity method,
decreased by $66,058 compared to the December 31, 1998 balance. This decrease
represents the Partnership's share of losses generated by the Venture during
1999. Refer to Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Venture for details pertaining to its financial
condition.
IDS/Jones Joint Venture Partners
- --------------------------------
In December 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. Following
the sale of the Aurora System, the Venture repaid all of its indebtedness,
settled working capital adjustments, deposited $3,283,500 into an interest-
bearing indemnity escrow account and distributed the remaining net sale proceeds
to its four partners.
5
<PAGE>
The $3,283,500 of the sale proceeds placed in an interest-bearing indemnity
escrow account remained in escrow until December 14, 1999, as security for the
Venture's agreement to indemnify the buyer under the asset purchase agreement.
No claims were made on the escrowed funds by the buyer. The escrowed funds plus
interest, which totaled $3,436,939, were returned to the Venture in December
1999. From the escrowed funds, the Venture repaid its remaining liabilities,
which totaled $2,012,230 at December 31, 1999, during the first quarter of 2000
and then the Venture will distribute the $1,424,709 balance to its four partners
in proportion to their ownership interests. The Partnership will receive
$347,629, or 24.4 percent, of this amount. The Partnership will pay its
remaining liabilities, which totaled $11,352 at December 31, 1999 and it will
hold the balance in reserve to cover the administrative expenses of the
Partnership until the Partnership is liquidated and dissolved. If any amounts
remain at the time of the Partnership's liquidation and dissolution, such
amounts will be distributed to the limited partners.
RESULTS OF OPERATIONS
- ---------------------
IDS/Jones Growth Partners 89-B, Ltd.
- ------------------------------------
All of the operations of the Partnership are represented exclusively by its
24.4 percent interest in the Venture. Refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations for the Venture
immediately below for details pertaining to its operations.
IDS/Jones Joint Venture Partners
- --------------------------------
The Venture conducted no operations in 1999; therefore, a discussion of
results of operations would not be meaningful. Other expense of $295,105
incurred in 1999, primarily related to various costs associated with the sale of
the Aurora System and the administration of the Venture.
ITEM 8. FINANCIAL STATEMENTS
- -----------------------------
The audited financial statements of the Partnership and the Venture for the
year ended December 31, 1999 follow.
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of IDS/Jones Growth Partners 89-B, Ltd.:
We have audited the accompanying balance sheets of IDS/JONES GROWTH
PARTNERS 89-B, LTD. (a Colorado limited partnership) as of December 31, 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 Managing General
Partner's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of IDS/Jones Growth Partners
89-B, Ltd. as of December 31, 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
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
-----------------------
<S> <C> <C>
ASSETS 1999 1998
------ ---------- ----------
Investment in cable television joint venture $ 347,629 $ 413,687
---------- ----------
Total assets $ 347,629 $ 413,687
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Jones Intercable advances $ 11,352 $ -
---------- ----------
Total liabilities 11,352 -
---------- ----------
PARTNERS' CAPITAL:
General Partners-
Contributed capital 500 500
Accumulated deficit (500) (500)
---------- ----------
- -
---------- ----------
Limited Partners-
Contributed capital (63,383 units
outstanding at December 31, 1999
and 1998) 12,623,901 12,623,901
Distributions (12,447,247) (12,447,247)
Accumulated earnings 159,623 237,033
---------- ----------
336,277 413,687
---------- ----------
Total liabilities and partners' capital $ 347,629 $ 413,687
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
8
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
<S> <C> <C> <C>
1999 1998 1997
-------- ----------- -----------
OTHER EXPENSE $(11,352) $ - $ -
EQUITY IN NET INCOME (LOSS) OF CABLE
TELEVISION JOINT VENTURE (66,058) 17,852,969 (1,495,617)
-------- ----------- -----------
NET INCOME (LOSS) $(77,410) $17,852,969 $(1,495,617)
======== =========== ===========
ALLOCATION OF NET INCOME (LOSS):
General Partners $ - $ 188,653 $ (14,956)
========= =========== ===========
Limited Partners $ (77,410) $17,664,316 $(1,480,661)
========= =========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (1.22) $ 278.69 $ (23.36)
========= =========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 63,383 63,383 63,383
======== =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
9
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------
<S> <C> <C> <C>
1999 1998 1997
-------- ------------ -----------
GENERAL PARTNERS:
Jones Cable Corporation
Balance, beginning of year $ - $ (94,327) $ (86,849)
Net income (loss) for year - 94,327 (7,478)
-------- ------------ -----------
Balance, end of year $ - $ - $ (94,327)
======== ============ ===========
IDS Cable Corporation
Balance, beginning of year $ - $ (94,326) $ (86,848)
Net income (loss) for year - 94,326 (7,478)
-------- ------------ -----------
Balance, end of year $ - $ - $ (94,326)
======== ============ ===========
Total
Balance, beginning of year $ - $ (188,653) $ (173,697)
Net income (loss) for year - 188,653 (14,956)
-------- ------------ -----------
Balance, end of year $ - $ - $ (188,653)
======== ============ ===========
LIMITED PARTNERS:
Balance, beginning of year $413,687 $ (4,803,382) $(3,322,721)
Distributions - (12,447,247) -
Net income (loss) for year (77,410) 17,664,316 (1,480,661)
-------- ------------ -----------
Balance, end of year $336,277 $ 413,687 $(4,803,382)
======== ============ ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
10
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
<S> <C> <C> <C>
1999 1998 1997
-------- ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(77,410) $ 17,852,969 $(1,495,617)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Equity in net (income) loss of
Cable Television Joint Venture 66,058 (17,852,969) 1,495,617
Increase (decrease) in Jones Intercable advances 11,352 (102,393) -
-------- ------------ -----------
Net cash used in operating activities - (102,393) -
-------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distribution from Joint Venture - 12,549,640 -
-------- ------------ -----------
Net cash provided by investing activities - 12,549,640 -
-------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to limited partners - (12,447,247) -
-------- ------------ -----------
Net cash used in financing activities - (12,447,247) -
-------- ------------ -----------
Net change in cash - - -
Cash, beginning of year - - -
-------- ------------ -----------
Cash, end of year $ - $ - $ -
======== ============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid
$ - $ - $ -
======== ============ ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
11
<PAGE>
IDS/JONES GROWTH PARTNERS 89-B, LTD.
------------------------------------
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------
Formation and Business
----------------------
IDS/Jones Growth Partners 89-B, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on March 7, 1989, pursuant to a public offering.
The Partnership was formed to acquire, develop and operate cable television
systems. Jones Cable Corporation, a Colorado corporation, is the "Managing
General Partner." IDS Cable Corporation, a Minnesota corporation, is the
"Supervising General Partner."
Change in Ownership of the Managing General Partner
---------------------------------------------------
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in Jones Intercable, Inc. ("Jones Intercable"), the
parent of the Managing 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 the Managing General Partner is now a wholly
owned subsidiary of Comcast JOIN Holdings, Inc. and, as such, is an indirect
wholly owned subsidiary of Comcast. The Managing General Partner and Comcast
JOIN Holdings, Inc. share corporate offices with Comcast at 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
Formation of Joint Venture
--------------------------
On May 30, 1990, the Partnership and IDS/Jones Growth Partners II, L.P.
("Growth Partners II"), an affiliated Colorado limited partnership, formed a
Colorado general partnership known as IDS/Jones Joint Venture Partners (the
"Venture"). The Venture was formed for the purpose of acquiring the cable
television system serving the communities of Aurora, North Aurora, Montgomery,
Plano, Oswego, Sandwich, Yorkville and certain unincorporated areas of Kendall
and Kane counties, all in the State of Illinois (the "Aurora System"). Under
the joint venture agreement between the joint venture partners, profits, losses
and distributions of the Venture will be shared in proportion to total capital
contributions made by the individual venture partners. Final Venture
capitalization was accomplished through contributions by Growth Partners II of
$37,592,709, the Partnership of $14,008,000, Jones Intercable of $2,872,000 and
IDS Management Corporation of $2,872,000. As a result of their equity
contributions to the Venture, IDS Management Corporation and Jones Intercable
each had a 5 percent equity interest in the Venture, Growth Partners II had a
65.6 percent interest and the Partnership had a 24.4 percent interest as of
December 31, 1999.
12
<PAGE>
Sale of Cable Television System
-------------------------------
In December 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. Following
the sale of the Aurora System, the Venture repaid all of its indebtedness,
settled working capital adjustments, deposited $3,283,500 into an indemnity
escrow account and distributed remaining net sale proceeds of $51,374,610 to the
Venture's four partners: the Partnership, Growth Partners 89-B, IDS Management
Corporation and Jones Intercable, in proportion to their ownership interests.
The Partnership received $12,549,640, or 24.4% of the $51,374,610 distribution.
The Partnership's portion of the net sale proceeds was used to repay the
outstanding balance of $102,393 due to the Managing General Partner and the
remaining $12,447,247 was distributed to its limited partners of record as of
December 4, 1998. This distribution provided the Partnership's limited partners
an approximate return of $196 for each $250 limited partnership interest, or
$784 for each $1,000 invested in the Partnership.
The $3,283,500 of the sale proceeds placed in an interest-bearing indemnity
escrow account remained in escrow until December 14, 1999, as security for the
Venture's agreement to indemnify the buyer under the asset purchase agreement.
No claims were made on the escrowed funds by the buyer. The escrowed funds plus
interest, which totaled $3,436,939, were returned to the Venture in December
1999. From the escrowed funds, the Venture repaid its remaining liabilities,
which totaled $2,012,230 at December 31, 1999 during the first quarter of 2000
and then the Venture will distribute the $1,424,709 balance to its four partners
in proportion to their ownership interests. The Partnership will receive
$347,629, or 24.4 percent, of this amount. The Partnership will pay its
remaining liabilities, which totaled $11,352 at December 31, 1999 and it will
hold the balance in reserve to cover the administrative expenses of the
Partnership until the Partnership is liquidated and dissolved. If any amounts
remain at the time of the Partnership's liquidation and dissolution, such
amounts will be distributed to the limited partners.
Contributed Capital
-------------------
The capitalization of the Partnership is set forth in the accompanying
statements of partners' capital (deficit). No limited partner is obligated to
make any additional contributions to partnership capital.
The Managing General Partner and the Supervising General Partner purchased
their interests in the Partnership by contributing $250 each to partnership
capital.
All profits and losses of the Partnership are allocated 99 percent to the
limited partners, 1/2 percent to the Managing General Partner and 1/2 percent to
the Supervising General Partner, except for income or gain from the sale or
disposition of cable television properties, which will be allocated to the
partners based upon the formula set forth in the partnership agreement and
interest income earned prior to the first acquisition by the Partnership of a
cable television system, which was allocated 100 percent to the limited
partners.
(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.
Investment in Cable Television Joint Venture
--------------------------------------------
The investment in the Venture is accounted for under the equity method.
The Venture incurred a loss of $270,729 in 1999, of which $66,058 was allocated
to the Partnership. The Venture recorded income of $64,747,788 in 1998, of
which $17,852,969 was allocated to the Partnership, and the Partnership received
distributions totaling $12,549,640. The Venture incurred a loss of $6,129,578
in 1997, of which $1,495,617 was allocated to the Partnership. The operations
of the Venture are significant to the Partnership and should be reviewed in
conjunction with these financial statements.
13
<PAGE>
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
-----------------------------------------------------
Management Fees, Supervision Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------------------------
Paid by the Venture Attributable to the Partnership
---------------------------------------------------
Jones Intercable managed the Partnership and the Venture and received a fee
for its services equal to 5 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. Jones Intercable did not receive a management
fee after December 4, 1998. Management fees paid to Jones Intercable by the
Venture during the years ended December 31, 1998 and 1997 (reflecting the
Partnership's 24.4 percent interest in the Venture) were $249,571 and $240,508,
respectively.
The Supervising General Partner participated in certain management
decisions of the Partnership and the Venture 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 did not receive a supervision fee
after December 4, 1998. Supervision fees paid by the Venture to the Supervising
General Partner during the years ended December 31, 1998 and 1997 (reflecting
the Partnership's 24.4 percent interest in the Venture) were $24,957 and
$24,051, respectively.
Any Partnership distributions made from cash flow (defined as cash
receipts derived from routine operations, less debt principal and interest
payments and cash expenses) are allocated 99 percent to the limited partners,
1/2 percent to the Managing General Partner and 1/2 percent to the Supervising
General Partner. Any distributions other than interest income on limited
partner subscriptions earned prior to the acquisition of the Partnership's first
cable television system or from cash flow, such as from the sale or refinancing
of a system or upon dissolution of the Partnership, will be made as follows:
first, to the limited partners in an amount which, together with all prior
distributions, will equal 125 percent of the amount initially contributed to the
Partnership capital by the limited partners; the balance, 75 percent to the
limited partners, 12-1/2 percent to the Managing General Partner and 12-1/2
percent to the Supervising General Partner.
The Venture reimburses 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 and its
constituent partnerships. Such services, and their related costs, are necessary
to the administration of the Venture and its constituent partnerships. Such
costs were charged to operating costs during the periods that the Venture
operated its cable television system. Subsequent to the sale of the Venture's
cable television system, such costs were charged to other expense.
Reimbursements made to the Managing General Partner by the Venture for overhead
and administrative expenses during the years ended December 31, 1999, 1998 and
1997 (reflecting the Partnership's 24.4 percent interest in the Venture) were
$9,774, $307,400 and $268,183, respectively.
The Supervising General Partner may also be reimbursed for certain expenses
incurred on behalf of the Venture. There were no reimbursements made to the
Supervising General Partner by the Venture for allocated overhead and
administrative expenses during the years ended December 31, 1999, 1998 and 1997.
During 1999, the Partnership was charged interest by Jones Intercable at an
average interest rate of 7.18 percent on amounts due Jones Intercable, which
approximated Jones Intercable's weighted average cost of borrowing. Total
interest charged to the Partnership by Jones Intercable during the year ended
December 31, 1999 was $448.
(4) INCOME TAXES
------------
Income taxes have not been recorded in the accompanying financial
statements because they accrue directly to the partners. The federal and state
income tax returns of the Partnership are prepared and filed by the Managing
General Partner.
The Partnership's tax returns, the qualification of the Partnership as such
for tax purposes, and the amount of distributable partnership income or loss are
subject to examination by federal and state taxing authorities. If such
examinations result in changes with respect to the Partnership's qualification
as such, or in changes with respect to the Partnership's recorded income or
loss, the tax liability of the general and limited partners would likely be
changed accordingly.
14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Partners of IDS/Jones Joint Venture Partners:
We have audited the accompanying balance sheets of IDS/JONES JOINT
VENTURE PARTNERS (a Colorado general partnership) as of December 31, 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 Venture's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS/Jones Joint
Venture Partners as of December 31, 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.
15
<PAGE>
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
December 31,
------------------------
ASSETS 1999 1998
------ ----------- -----------
<S> <C> <C>
CASH $ 3,436,939 $ -
PROCEEDS FROM SALE IN INTEREST-BEARING ESCROW ACCOUNT - 3,283,500
----------- -----------
Total assets $ 3,436,939 $ 3,283,500
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ - $ 921,589
Jones Intercable advances 2,012,230 666,473
----------- -----------
Total liabilities 2,012,230 1,588,062
----------- -----------
PARTNERS' CAPITAL:
Contributed capital 57,344,709 57,344,709
Distributions (51,374,610) (51,374,610)
Accumulated deficit (4,545,390) (4,274,661)
----------- -----------
1,424,709 1,695,438
----------- -----------
Total liabilities and partners' capital $ 3,436,939 $ 3,283,500
=========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
16
<PAGE>
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1999 1998 1997
---------- ------------ ------------
<S> <C> <C> <C>
REVENUES $ - $20,456,640 $19,713,788
COSTS AND EXPENSES:
Operating expenses - 11,893,511 10,837,726
Management and supervision
fees and allocated overhead
from General Partners - 2,384,949 2,183,367
Depreciation and amortization - 8,199,268 9,071,373
--------- ----------- -----------
OPERATING LOSS - (2,021,088) (2,378,678)
--------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (129,063) (3,440,861) (3,759,271)
Interest income on escrowed proceeds 153,439 - -
Gain on sale of cable television system - 70,031,908 -
Other, net (295,105) 177,829 8,371
--------- ----------- -----------
Total other income (expense), net (270,729) 66,768,876 (3,750,900)
--------- ----------- -----------
NET INCOME (LOSS) $(270,729) $64,747,788 $(6,129,578)
========= =========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
17
<PAGE>
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
-----------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
<S> <C> <C> <C>
1999 1998 1997
---------- ------------ ------------
IDS/JONES GROWTH PARTNERS 89-B, LTD.:
Balance, beginning of year $ 413,687 $ (4,889,642) $ (3,394,025)
Distributions - (12,549,640) -
Net income (loss) for year (66,058) 17,852,969 (1,495,617)
---------- ------------ ------------
Balance, end of year $ 347,629 $ 413,687 $ (4,889,642)
========== ============ ============
IDS/JONES GROWTH PARTNERS II, L.P.:
Balance, beginning of year $1,112,207 $ (7,572,842) $ (3,551,839)
Distributions - (33,678,970) -
Net income (loss) for year (177,598) 42,364,019 (4,021,003)
---------- ------------ ------------
Balance, end of year $ 934,609 $ 1,112,207 $ (7,572,842)
========== ============ ============
JONES INTERCABLE, INC.:
Balance, beginning of year $ 84,772 $ 392,372 $ 698,851
Distributions - (2,573,000) -
Net income (loss) for year (13,537) 2,265,400 (306,479)
---------- ------------ ------------
Balance, end of year $ 71,235 $ 84,772 $ 392,372
========== ============ ============
IDS MANAGEMENT CORPORATION:
Balance, beginning of year $ 84,772 $ 392,372 $ 698,851
Distributions - (2,573,000) -
Net income (loss) for year (13,536) 2,265,400 (306,479)
---------- ------------ ------------
Balance, end of year $ 71,236 $ 84,772 $ 392,372
========== ============ ============
Total:
Balance, beginning of year $1,695,438 $(11,677,740) $ (5,548,162)
Distributions - (51,374,610) -
Net income (loss) for year (270,729) 64,747,788 (6,129,578)
---------- ------------ ------------
Balance, end of year $1,424,709 $ 1,695,438 $(11,677,740)
========== ============ ============
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
18
<PAGE>
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1999 1998 1997
------------ -------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (270,729) $ 64,747,788 $(6,129,578)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization - 8,199,268 9,071,373
Gain on sale of cable television system - (70,031,908) -
Decrease (increase) in trade receivables - 565,702 (79,424)
Increase in deposits, prepaid expenses and
other assets - (964,253) (346,473)
Increase (decrease) in accounts payable,
accrued liabilities and subscriber prepayments (921,589) (1,814,011) 687,548
Increase (decrease) in Jones Intercable advances 1,345,757 (343,974) (54,533)
----------- ------------- -----------
Net cash provided by
operating activities 153,439 358,612 3,148,913
----------- ------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net - (4,231,476) (4,464,041)
Proceeds from sale of cable television system,
net of escrow - 105,216,500 -
Escrow proceeds received 3,283,500 - -
----------- ------------- -----------
Net cash provided by (used in)
investing activities 3,283,500 100,985,024 (4,464,041)
----------- ------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 47,390 1,431,266
Repayment of debt - (50,141,182) (30,608)
Distribution to limited partners - (33,678,970) -
Distributions to Venture Partners - (17,695,640) -
----------- ------------- -----------
Net cash provided by (used in)
financing activities - (101,468,402) 1,400,658
----------- ------------- -----------
Increase (decrease) in cash 3,436,939 (124,766) 85,530
Cash, beginning of year - 124,766 39,236
----------- ------------- -----------
Cash, end of year $3,436,939 $ - $ 124,766
=========== ============= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 5,334,479 $ 3,644,227
=========== ============= ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
19
<PAGE>
IDS/JONES JOINT VENTURE PARTNERS
--------------------------------
(A General Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) ORGANIZATION AND PARTNERS' INTERESTS
------------------------------------
Formation and Business
----------------------
Jones Cable Corporation, a Colorado corporation, is the "Managing General
Partner" and manager of IDS/Jones Growth Partners 89-B, Ltd. ("Growth Partners
89-B") and IDS/Jones Growth Partners II, L.P. ("Growth Partners II"). IDS Cable
Corporation, a Minnesota corporation, is the "Supervising General Partner" of
Growth Partners 89-B. IDS Cable II Corporation, a Minnesota corporation, is the
"Supervising General Partner" of Growth Partners II.
On May 30, 1990, Growth Partners 89-B and Growth Partners II, an affiliated
Colorado limited partnership, formed a Colorado general partnership known as
IDS/Jones Joint Venture Partners (the "Venture"). The Venture was formed for
the purpose of acquiring the cable television system serving the communities of
Aurora, North Aurora, Montgomery, Plano, Oswego, Sandwich, Yorkville and certain
unincorporated areas of Kendall and Kane counties, all in the State of Illinois
(the "Aurora System"). Under the joint venture agreement between the joint
venture partners, profits, losses and distributions of the Venture will be
shared in proportion to total capital contributions made by the individual
venture partners. Final Venture capitalization was accomplished through
contributions by Growth Partners II of $37,592,709, Growth Partners 89-B of
$14,008,000, Jones Intercable, Inc. ("Jones Intercable") of $2,872,000 and IDS
Management Corporation of $2,872,000. As a result of their equity contributions
to the Venture, IDS Management Corporation and Jones Intercable each had a 5
percent equity interest in the Venture, Growth Partners II had a 65.6 percent
interest and Growth Partners 89-B had a 24.4 percent interest as of December 31,
1999.
Change in Ownership of the Managing General Partner and Venture Partners
------------------------------------------------------------------------
On April 7, 1999, Comcast Corporation ("Comcast") completed the acquisition
of a controlling interest in Jones Intercable, the former parent of the Managing
General Partner. 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 the Managing General Partner is now a wholly
owned subsidiary of Comcast JOIN Holdings, Inc. and, as such, is an indirect
wholly owned subsidiary of Comcast. The Managing General Partner and Comcast
JOIN Holdings, Inc. share corporate offices with Comcast at 1500 Market Street,
Philadelphia, Pennsylvania 19102-2148.
Cable Television System Sale
----------------------------
In December 1998, the Venture sold the Aurora System, its only operating
asset, to an unaffiliated party for a sales price of $108,500,000. From the
sale of the Aurora System, the Venture repaid all of its indebtedness, settled
working capital adjustments, deposited $3,283,500 into an interest-bearing
indemnity escrow account and distributed the remaining net sale proceeds of
$51,374,610 to its four partners in proportion to their ownership interests.
20
<PAGE>
The $3,283,500 of the sale proceeds placed in an interest-bearing indemnity
escrow account remained in escrow until December 14, 1999, as security for the
Venture's agreement to indemnify the buyer under the asset purchase agreement.
No claims were made on the escrowed funds by the buyer. The escrowed funds plus
interest, which totaled $3,436,939, were returned to the Venture in December
1999. From the escrowed funds, the Venture repaid its remaining liabilities,
which totaled $2,012,230 at December 31, 1999, during the first quarter of 2000
and then the Venture will distribute the $1,424,709 balance to its four partners
in proportion to their ownership interests.
Contributed Capital
-------------------
The capitalization of the Venture is set forth in the accompanying
statements of partners' capital (deficit).
All Venture distributions, including those made from cash flow, from the
sale or refinancing of Venture property and on dissolution of the Venture, shall
be made to the Venture partners in proportion to their respective interests in
the Venture.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Records
------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Venture's tax returns are also prepared on the accrual basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires 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 primarily using
the straight-line method over the following estimated service lives:
<TABLE>
<CAPTION>
<S> <C> <C>
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
</TABLE>
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 was written off as certain assets became fully depreciated and were
no longer in service.
Intangible Assets
-----------------
Costs assigned to franchises and costs in excess of interests in net assets
purchased were amortized using the straight-line method over the following
estimated useful lives:
Franchise costs 2 years
Costs in excess of interests in net assets purchased 32 years
Revenue Recognition
-------------------
Subscriber prepayments were initially deferred and recognized as revenue
when earned.
21
<PAGE>
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
-----------------------------------------------------
Management Fees, Supervision Fees, Distribution Ratios and Reimbursements
-------------------------------------------------------------------------
Jones Intercable managed the Aurora System on behalf of the Venture and
received a fee for its services equal to 5 percent of the gross revenues of the
Venture, excluding revenues from the sale of cable television systems or
franchises. Jones Intercable did not receive a management fee after December 4,
1998. Management fees paid by the Venture to Jones Intercable during the years
ended December 31, 1998 and 1997 were $1,022,832 and $985,689, respectively.
The Supervising General Partners participated in certain management
decisions of the Venture and each received a fee for their services equal to 1/2
percent of the gross revenues of the Venture, excluding revenues from the sale
of cable television systems or franchises. The Supervising General Partners did
not receive a supervision fee after December 4, 1998. Supervision fees paid by
the Venture to the Supervising General Partners during the years ended December
31, 1998 and 1997 were $102,283 and $98,569, respectively.
The Venture reimburses Jones Intercable 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 and its constituent
partnerships. Such services, and their related costs, are necessary to the
administration of the Venture and its constituent partnerships. Such costs were
charged to operating costs during the periods that the Venture operated its
cable television system. Subsequent to the sale of the Venture's cable
television system, such costs were charged to other expense. Reimbursements
made to Jones Intercable by the Venture for overhead and administrative expenses
during the year ended December 31, 1999, 1998 and 1997 were $40,056, $1,259,834
and $1,099,109, respectively.
The Supervising General Partners may also be reimbursed for certain
expenses incurred on behalf of the Venture. There were no reimbursements made
to the Supervising General Partners by the Venture for allocated overhead and
administrative expenses during the years ended December 31, 1999, 1998 and 1997.
During 1999, the Venture was charged interest by Jones Intercable at an
average interest rate of 7.18 percent on amounts due Jones Intercable, which
approximated Jones Intercable's weighted average cost of borrowing. Total
interest charged to the Venture by Jones Intercable during the years ended
December 31, 1999, 1998 and 1997 was $129,063, $134,823 and $241,938,
respectively.
Payments to/from Affiliates for Programming Services
----------------------------------------------------
Prior to the sale of its cable television system in 1998, the Venture
received programming from Superaudio, Knowledge TV, Inc., Jones Computer
Network, Ltd., Great American Country, Inc. and Product Information Network, all
of which were affiliates of Jones Intercable until April 7, 1999 (see Note 1).
Payments to Superaudio totaled $38,757 and $31,413, respectively, in 1998
and 1997. Payments to Knowledge TV, Inc. totaled $40,244 and $34,932,
respectively, in 1998 and 1997. Payments to Jones Computer Network, Ltd., whose
service was discontinued in April 1997, totaled $22,875 in 1997. Payments to
Great American Country, Inc., totaled $37,837 and $35,504, respectively, in 1998
and 1997.
Prior to the sale of its cable television system in 1998, the Venture
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 Venture totaling $75,838 and $71,847 in 1998 and 1997,
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 Venture are prepared and filed by the Managing General
Partner.
The Venture's tax returns, the qualification of the Venture as such for tax
purposes, and the amount of distributable Venture income or loss are subject to
examination by federal and state taxing authorities. If such examinations
result in changes with respect to the Partnership's qualification as such, or in
changes with respect to the Venture's recorded income or loss, the tax liability
of the general and limited partners would likely be changed accordingly.
22
<PAGE>
(5) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
-----------------------------------------
Supplementary profit and loss information for the respective years is
presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1999 1998 1997
----- ---------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ - $ 133,032 $ 142,981
===== ========== ==========
Taxes, other than income and payroll taxes $ - $ 32,175 $ 33,847
===== ========== ==========
Advertising $ - $ 248,621 $ 243,977
===== ========== ==========
Depreciation of property, plant and equipment $ - $3,763,130 $3,708,135
===== ========== ==========
Amortization of intangible assets $ - $4,436,138 $5,363,238
===== ========== ==========
</TABLE>
23
<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 Managing General Partner
is set forth below. Directors of the Managing General Partner serve until the
next annual meeting of the Managing General Partner and until their successors
shall be elected and qualified.
Ralph J. Roberts is Chairman of the Managing 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 Holdings in March 2000. He now
serves in these same capacities for Holdings. 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 Managing General
Partner. Mr. Roberts served as President and a director of Jones Intercable,
Inc. from April 1999 until its merger with Holdings in March 2000. He now
serves in these same capacities for Holdings. 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
Managing General Partner. Mr. Smith served as an Executive Vice President and a
director of Jones Intercable, Inc. from April 1999 until its merger with
Holdings in March 2000. He now serves in these same capacities for Holdings. 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 Managing 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 Holdings in March 2000. He now serves as Executive Vice
President and Secretary of Holdings. 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 Managing
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
Holdings in March 2000. He now serves as Executive Vice President and Treasurer
of Holdings. 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 Managing 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 Managing General Partner were directors
and executive officers of Jones Intercable prior to its
24
<PAGE>
merger with Holdings on March 2, 2000. Jones Intercable was the parent of the
Managing General Partner prior to March 2, 2000. These persons became directors
and executive officers of Jones Intercable on April 7, 1999, the date 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.
Certain information concerning directors and executive officers of the
Supervising General Partner is set forth below. Directors of the Supervising
General Partner serve until the next annual meeting of the Supervising General
Partner and until their successors shall be elected and qualified.
John C. Boeder, 58, is the President and a director of the Supervising
General Partner. He joined American Express Financial Corporation in 1964. He
was elected President of the Supervising General Partner in December 1999,
replacing Peter J. Slattery who assumed a new position at American Express
Financial Corporation. Since January 1999 he has held the position of Vice
President and General Manager - Non-Proprietary Products Group for American
Express Financial Corporation. He has overall responsibility for the
non-proprietary products offered through American Express Financial Advisors'
distribution channels. In addition, he oversees American Express Financial
Advisors' Direct Investment and Limited Partnership businesses. He has also
served in the past as President of IDS Life Insurance Company of New York and
has held numerous marketing positions in the insurance, annuity and mutual fund
departments of American Express Financial Corporation.
Patty L. Moren, 39, is a Vice President and a director of the
Supervising General Partner. She joined American Express Financial Corporation
in 1985 as Audit Manager and later held positions as Manager of Sales
Compensation and Director of Field Compensation. In 1999, she was promoted to
Vice President and Controller - Variable Assets for American Express Financial
Corporation and is charged with overall finance responsibilities for mutual
funds, Wealth Management Services, variable annuities and limited partnerships.
Jeffrey S. Horton, 39, is a Vice President and Treasurer and a
director of the Supervising General Partner. He joined American Express
Financial Corporation in July 1987. He was named Vice President - Corporate
Treasurer for American Express Financial Corporation in December 1997. Prior to
December 1997, Mr. Horton has served in various capacities with American Express
Financial Corporation including the Director of Finance (Marketing and
Products), Controller for Information Technology and Vice President Controller
for Information Technology.
Ronald W. Powell, 55, is a Vice President of the Supervising General
Partner. He has held the position of Vice President and Assistant General
Counsel with American Express Financial Corporation since November 1985. He has
been a member of the American Express Financial Corporation law department since
1975.
25
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
Neither the Partnership nor the Venture have any employees; however,
various personnel are required to administer the financial, tax and legal
affairs of the Partnership and the Venture and to maintain the books and records
of the Partnership. Such personnel are employed by Comcast and, pursuant to the
terms of the Partnership's limited partnership agreement, the costs of such
employment are charged by Comcast to the Partnership and the Venture. 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 and the Venture reimburse the Managing General Partner
for certain allocated overhead and administrative expenses. These expenses
represent the salaries and benefits paid to corporate personnel. Such personnel
provide administrative, accounting, legal and investor relations services to the
Partnership and the Venture. The Partnership and the Venture will continue to
reimburse the Managing General Partner for actual time spent on Partnership and
Venture business by employees of Comcast until the Partnership and the Venture
are liquidated and dissolved. During the year ended December 31, 1999, such
reimbursements made by the Venture totaled $40,056. The Partnership made no
such reimbursements in 1999.
The Partnership and the Venture are charged interest on amounts
advanced by the Managing General Partner. 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 Partnership paid
interest charges of $448 and the Venture paid interest charges of $129,063.
The Partnership and the Venture paid no management fees or brokerage
fees or programming service fees to affiliates during 1999 and it is expected
that the Partnership and the Venture will never again pay management fees or
brokerage fees or programming service fees.
26
<PAGE>
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a)1. See index to financial statements for list of financial statements
and exhibits thereto filed as part of this report.
3. The following exhibits are filed herewith:
4.1 Limited Partnership Agreement for IDS/Jones Growth Partners 89-B,
Ltd. (Incorporated by reference from the Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990)
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None.
27
<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.
IDS/JONES GROWTH PARTNERS 89-B, LTD.,
a Colorado limited partnership
By: Jones Cable Corporation,
a Colorado corporation,
its managing 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)
28
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<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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<PP&E> 0
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0
0
<COMMON> 0
<OTHER-SE> 336,277
<TOTAL-LIABILITY-AND-EQUITY> 347,629
<SALES> 0
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<CGS> 0
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<OTHER-EXPENSES> 77,410
<LOSS-PROVISION> 0
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<CHANGES> 0
<NET-INCOME> (77,410)
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