<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998.
[ ] 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: 0-18133
IDS/JONES GROWTH PARTNERS II, L.P.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in charter
Colorado #84-1060548
- --------------------------------------------------------------------------------
State of organization I.R.S. employer I.D. #
9697 East Mineral Avenue, P.O. Box 3309, Englewood, Colorado 80155-3309
------------------------------------------------------------------------
Address of principal executive office
(303) 792-3111
----------------------------------
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
----- ------
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1998 1997
------ -------------- -------------
<S> <C> <C>
CASH $ 193,366 $ 124,766
TRADE RECEIVABLES, less allowance for doubtful receivables
of $140,841 and $91,156 at September 30, 1998 and December 31,
1997, respectively 317,203 565,702
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 50,294,963 47,080,064
Less - accumulated depreciation (26,729,181) (23,938,318)
------------ ------------
23,565,782 23,141,746
Franchise costs and other intangible assets, net of accumulated
amortization of $59,079,683 and $55,831,988, at September 30, 1998
and December 31, 1997, respectively 14,618,312 17,866,007
------------ ------------
Total investment in cable television properties 38,184,094 41,007,753
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 313,930 463,878
------------ ------------
Total assets $ 39,008,593 $ 42,162,099
============ ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
2
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
-------------- -------------
<S> <C> <C>
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
LIABILITIES:
Debt $ 50,117,619 $ 50,093,792
Managing General Partner advances 345,690 343,974
Accrued liabilities 3,886,264 3,342,658
Subscriber prepayments 54,910 58,915
------------ ------------
Total liabilities 54,404,483 53,839,339
------------ ------------
MINORITY INTEREST IN JOINT VENTURE (5,384,114) (4,104,898)
------------ ------------
PARTNERS' DEFICIT:
General Partners-
Contributed capital 500 500
Accumulated deficit (476,049) (451,655)
------------ ------------
(475,549) (451,155)
------------ ------------
Limited Partners-
Net contributed capital (174,343 units outstanding
at September 30, 1998 and December 31, 1997) 37,256,546 37,256,546
Accumulated deficit (46,792,773) (44,377,733)
------------ ------------
(9,536,227) (7,121,187)
------------ ------------
Total liabilities and partners' deficit $ 39,008,593 $ 42,162,099
============ ============
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
3
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1998 1997 1998 1997
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
REVENUES $ 5,500,894 $ 4,855,813 $16,122,933 $14,497,368
COSTS AND EXPENSES:
Operating expenses 2,997,425 2,628,395 8,754,851 8,028,851
Management and supervision fees
and allocated overhead from
General Partners 611,394 528,250 1,820,001 1,618,281
Depreciation and amortization 2,207,141 2,017,835 6,313,083 6,816,498
----------- ----------- ----------- -----------
OPERATING LOSS (315,066) (318,667) (765,002) (1,966,262)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (891,653) (1,002,985) (2,786,417) (2,828,040)
Other, net (150,355) 28,026 (167,231) 14,585
----------- ----------- ----------- -----------
Total other income (expense), net (1,042,008) (974,959) (2,953,648) (2,813,455)
----------- ----------- ----------- -----------
CONSOLIDATED LOSS (1,357,074) (1,293,626) (3,718,650) (4,779,717)
MINORITY INTEREST IN
CONSOLIDATED LOSS 466,834 445,007 1,279,216 1,644,223
----------- ----------- ----------- -----------
NET LOSS $ (890,240) $ (848,619) $(2,439,434) $(3,135,494)
=========== =========== =========== ===========
ALLOCATION OF NET LOSS:
General Partners $ (8,902) $ (8,486) $ (24,394) $ (31,355)
=========== =========== =========== ===========
Limited Partners $ (881,338) $ (840,133) $(2,415,040) $(3,104,139)
=========== =========== =========== ===========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (5.05) $ (4.81) $ (13.85) $ (17.80)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 174,343 174,343 174,343 174,343
=========== =========== =========== ===========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
4
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
---------------------------
1998 1997
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,439,434) $(3,135,494)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 6,313,083 6,816,498
Minority interest in consolidated loss (1,279,216) (1,644,223)
Decrease in trade receivables 248,499 155,451
Increase in deposits, prepaid expenses and
deferred charges (124,577) (266,738)
Increase in accrued liabilities and subscriber
prepayments 539,601 357,960
Increase (decrease) in Managing General Partner
advances 1,716 (179,858)
----------- -----------
Net cash provided by operating activities 3,259,672 2,103,596
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (3,214,899) (2,932,246)
----------- -----------
Net cash used in investing activities (3,214,899) (2,932,246)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 47,390 831,266
Repayment of debt (23,563) (23,411)
----------- -----------
Net cash provided by financing activities 23,827 807,855
----------- -----------
Increase (decrease) in cash 68,600 (20,795)
Cash, beginning of period 124,766 39,236
----------- -----------
Cash, end of period $ 193,366 $ 18,441
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 2,653,171 $ 2,998,629
=========== ===========
</TABLE>
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
5
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED 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
II, L.P. (the "Partnership") at September 30, 1998 and December 31, 1997, its
Statements of Operations for the three and nine month periods ended September
30, 1998 and 1997 and its Statements of Cash Flows for the nine month periods
ended September 30, 1998 and 1997. Results of operations for these periods are
not necessarily indicative of results to be expected for the full year.
The Partnership owns a 65.6 percent interest in IDS/Jones Joint Venture
Partners (the "Venture") through capital contributions of $37,592,709. 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.
The accompanying financial statements include 100 percent of the accounts
of the Partnership and those of the Venture, reduced by the 34.4 percent
minority interest in the Venture. All interpartnership accounts and
transactions have been eliminated.
(2) In July 1998, the Venture entered into an asset purchase agreement to sell
the Aurora System to an unaffiliated party for a sales price of $108,500,000,
subject to customary closing adjustments. Closing of the sale, which is expected
to occur in the fourth quarter of 1998, will be subject to several conditions,
including necessary governmental and other third party consents. The sale was
approved by the owners of a majority of the interests of both the Partnership
and IDS/Jones Growth Partners 89-B, Ltd. ("89-B"). IDS Cable II Corporation (the
"Supervising General Partner") has also consented to the transaction. Upon the
closing of the proposed sale of the Aurora System, based upon financial
information as of September 30, 1998, the Venture will repay all of its
indebtedness, including $47,000,000 borrowed under its credit facility, capital
lease obligations totaling $110,972, related parties' notes totaling $1,600,000
and the subordinated advance of $1,406,647 to Jones Intercable, Inc. ("JIC"),
settle working capital adjustments, and then deposit $3,283,500 into an
indemnity escrow account. The remaining net sale proceeds of approximately
$51,630,000 will be distributed to the Venture's four partners: the Partnership,
89-B, IDS Management Corporation and JIC, in proportion to their ownership
interests. The Partnership will receive $33,869,000, or 65.6 percent of the
$51,630,000 distribution, which the Partnership will distribute to its partners
of record as of the closing date of the sale of the Aurora System. Based upon
financial information as of September 30, 1998, this distribution will give the
Partnership's limited partners an approximate return of $194 for each $250
limited partnership interest, or $776 for each $1,000 invested in the
Partnership.
The $3,283,500 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow from the closing date until November 15, 1999 as
security for the Partnership's agreement to indemnify the buyer under the asset
purchase agreement. The Partnership's primary exposure, if any, will relate to
the representations and warranties to be made about the Aurora System in the
asset purchase agreement. Any amounts remaining from this indemnity escrow
account and not claimed by the buyer at the end of the escrow period will be
returned to and distributed to the Partnership, 89-B, IDS Management Corporation
and JIC. If the entire $3,283,500 escrow amount is distributed, the Partnership
would receive approximately $2,153,976, or 65.6 percent. The Partnership would
then distribute the $2,153,976 to the limited partners, which would represent an
approximate return of $12 for each $250 limited partnership interest, or $48 for
each $1,000 invested in the Partnership. The Partnership will continue in
existence at least until any amounts remaining from the indemnity escrow account
have been distributed. Since the Aurora System represents the only asset of the
Partnership and the Venture, the Partnership and the Venture will be liquidated
and dissolved upon the final distribution of any amounts remaining from the
indemnity escrow account, most likely in the fourth quarter of 1999. If any
disputes with respect to the indemnification arise, the Partnership and the
Venture would not be dissolved until such disputes were resolved, which could
result in the Partnership and the Venture continuing in existence beyond 1999.
(3) The Managing General Partner manages the Partnership and the Venture and
receives a fee for its services equal to 5 percent of the gross revenues of the
Venture, excluding revenues from the sale of cable television systems or
franchises.
6
<PAGE>
Management fees paid to the Managing General Partner for the three and nine
month periods ended September 30, 1998 were $275,045 and $806,147, respectively,
compared to $242,790 and $724,868, respectively, for the three and nine month
periods ended September 30, 1997.
The Supervising General Partner and IDS Cable Corporation (the supervising
general partner of 89-B) participate in certain management decisions of the
Venture and receive a fee for their services equal to 1/2 percent of the gross
revenues of the Venture, excluding revenues from the sale of cable television
systems or franchises. Supervision fees for the three and nine month periods
ended September 30, 1998 were $27,505 and $80,615, respectively, compared to
$24,279 and $72,487, respectively, for the three and nine month periods ended
September 30, 1997.
The Venture reimburses JIC, the parent of the Managing General Partner, for
certain allocated overhead and administrative expenses. These expenses
represent the salaries and related benefits paid for corporate personnel, rent,
data processing services and other corporate facilities costs. Such personnel
provide engineering, marketing, administrative, accounting, legal and investor
relations services to the Venture. Such services, and their related costs, are
necessary to the operations of the Venture and would have been incurred by the
Venture if it was a stand alone entity. Allocations of personnel costs are
based on actual time spent by employees of JIC with respect to each partnership
managed. Remaining expenses are allocated based on the pro rata relationship of
the Venture's revenues to the total revenues of all systems owned or managed by
JIC and certain of its affiliates. Systems owned by JIC and all other systems
owned by partnerships for which JIC or affiliates are the general partners are
also allocated a proportionate share of these expenses. JIC believes that the
methodology used in allocating overhead and administrative expenses is
reasonable. Reimbursements made to JIC by the Venture for allocated overhead
and administrative expenses during the three and nine month periods ended
September 30, 1998 were $308,844 and $933,239, respectively, compared to
$261,181 and $820,926, respectively, for the three and nine month periods ended
September 30, 1997.
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 for allocated overhead and administrative
expenses during the three and nine month periods ended September 30, 1998 and
1997.
7
<PAGE>
IDS/JONES GROWTH PARTNERS II, L. P.
-----------------------------------
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership owns a 65.6 percent interest in the Venture. The
accompanying financial statements include the accounts of the Partnership and
the Venture, reduced by the 34.4 percent minority interest in the Venture. The
Venture owns the Aurora System.
On December 5, 1991, JIC made an equity investment in the Venture in the
amount of $2,872,000. Also on December 5, 1991, IDS Management Corporation made
an equity investment in the Venture of $2,872,000. As a result of their equity
contributions to the Venture, IDS Management Corporation and JIC each have a 5
percent equity interest in the Venture, the Partnership has a 65.6 percent
interest and 89-B has a 24.4 percent interest.
In July 1998, the Venture entered into an asset purchase agreement to sell
the Aurora System to an unaffiliated party for a sales price of $108,500,000,
subject to customary closing adjustments. Closing of the sale, which is
expected to occur in the fourth quarter of 1998, will be subject to several
conditions, including necessary governmental and other third party consents.
The sale was approved by the owners of a majority of the interests of both the
Partnership and IDS/Jones Growth Partners 89-B, Ltd. ("89-B"). IDS Cable II
Corporation (the "Supervising General Partner") has also consented to the
transaction. Upon the closing of the proposed sale of the Aurora System, based
upon financial information as of September 30, 1998, the Venture will repay all
of its indebtedness, including $47,000,000 borrowed under its credit facility,
capital lease obligations totaling $110,972, related parties' notes totaling
$1,600,000 and the subordinated advance of $1,406,647 to Jones Intercable, Inc.
("JIC"), settle working capital adjustments, and then deposit $3,283,500 into an
indemnity escrow account. The remaining net sale proceeds of approximately
$51,630,000 will be distributed to the Venture's four partners: the
Partnership, 89-B, IDS Management Corporation and JIC, in proportion to their
ownership interests. The Partnership will receive $33,869,000, or 65.6 percent
of the $51,630,000 distribution, which the Partnership will distribute to its
partners of record as of the closing date of the sale of the Aurora System.
Based upon financial information as of September 30, 1998, this distribution
will give the Partnership's limited partners an approximate return of $194 for
each $250 limited partnership interest, or $776 for each $1,000 invested in the
Partnership.
The $3,283,500 of the sale proceeds to be placed in the indemnity escrow
account will remain in escrow from the closing date until November 15, 1999 as
security for the Partnership's agreement to indemnify the buyer under the asset
purchase agreement. The Partnership's primary exposure, if any, will relate to
the representations and warranties to be made about the Aurora System in the
asset purchase agreement. Any amounts remaining from this indemnity escrow
account and not claimed by the buyer at the end of the escrow period will be
returned to and distributed to the Partnership, 89-B, IDS Management Corporation
and JIC at that time. If the entire $3,283,500 escrow amount is distributed,
the Partnership would receive approximately $2,153,976, or 65.6 percent. The
Partnership would then distribute the $2,153,976 to the limited partners, which
would represent an approximate return of $12 for each $250 limited partnership
interest, or $48 for each $1,000 invested in the Partnership. The Partnership
will continue in existence at least until any amounts remaining from the
indemnity escrow account have been distributed. Since the Aurora System
represents the only asset of the Partnership and the Venture, the Partnership
and the Venture will be liquidated and dissolved upon the final distribution of
any amounts remaining from the indemnity escrow account, most likely in the
fourth quarter of 1999. If any disputes with respect to the indemnification
arise, the Partnership and the Venture would not be dissolved until such
disputes were resolved, which could result in the Partnership and the Venture
continuing in existence beyond 1999.
For the nine months ended September 30, 1998, the Venture generated net
cash from operating activities totaling $3,259,672, which is available to fund
capital expenditures and non-operating costs. During the first nine months of
1998, the Venture expended approximately $3,215,000 on capital expenditures.
Approximately 46 percent of the expenditures related to construction of service
drops to subscriber homes. Approximately 34 percent of the expenditures related
to plant extensions to new homes passed. The remainder was for other capital
expenditures to maintain the value of the Aurora System until it is sold.
Funding for these expenditures was provided by cash generated from operations
and cash on hand. Anticipated capital expenditures for the remainder of 1998
are approximately $1,095,000. Approximately 66 percent of the anticipated
capital expenditures is for plant extensions to new homes passed. Approximately
9 percent of the anticipated
8
<PAGE>
expenditures is for construction of service drops to subscriber homes. These
capital expenditures are necessary to maintain the value of the Aurora System
until it is sold. Funding for these expenditures is expected to be provided by
cash generated from operations and, if necessary and in its discretion,
borrowings from JIC. The Venture is obligated to conduct its business in the
ordinary course until the Aurora System is sold.
On December 5, 1991, JIC made a $1,800,000 loan to the Venture, of which
$1,200,000 had been repaid as of September 30, 1998. In the first quarter of
1994, JIC agreed to subordinate to all other Venture debt its $1,406,647 advance
to the Venture outstanding at March 31, 1994 and IDS Management Corporation made
a loan of $1,000,000 to the Venture to fund principal repayments due on March
31, 1994 on the Venture's then-outstanding term loan. The interest rates on the
respective loans, which will vary from time to time, with respect to IDS
Management Corporation's loan are at its cost of borrowing, and, with respect to
JIC's loans, are at its weighted average cost of borrowing. All of these
amounts owed to these related parties will be paid by the Venture with proceeds
to be received on the proposed sale of the Aurora System.
The Venture is a party to a $47,000,000 revolving credit and term loan
agreement with commercial banks. The agreement allows for a reducing revolving
commitment that will begin to reduce quarterly on June 30, 1999 until December
31, 1999, at which time the commitment will reduce to zero and all principal and
interest amounts will be due and payable in full. At September 30, 1998, all
$47,000,000 was outstanding under this agreement. The entire outstanding
balance of the revolving credit and term loan agreement will be repaid by the
Venture with proceeds from the proposed sale of the Aurora System. Interest on
the credit facility is at the Venture's option of the Prime Rate plus .5
percent, the London Interbank Offered Rate plus 1.5 percent or the Certificate
of Deposit Rate plus 1.625 percent. The effective interest rates on outstanding
obligations to non-affiliates as of September 30, 1998 and 1997 were 7.18
percent and 7.32 percent, respectively.
The Venture will rely on cash generated from operations and, if necessary
and in its discretion, advances from JIC to meet its liquidity needs until the
Aurora System is sold.
RESULTS OF OPERATIONS
- ---------------------
Revenues of the Venture's Aurora System increased $645,081, or
approximately 13 percent, to $5,500,894 for the three month period ended
September 30, 1998 compared to $4,855,813 for the comparable 1997 period.
Revenues increased $1,625,565, or approximately 11 percent, to $16,122,933 for
the nine months ended September 30, 1998 compared to $14,497,368 for the
comparable 1997 period. Increases in basic service revenues primarily accounted
for the increases in revenues for the three and nine month periods ended
September 30, 1998. Basic service rate increases accounted for approximately 36
percent and 38 percent, respectively, of the increases in revenues for the three
and nine month periods ended September 30, 1998. Increases in the number of
basic service subscribers accounted for approximately 34 percent and 42 percent,
respectively, of the increases in revenues for the three and nine month periods.
The number of basic service subscribers increased 3,054, or approximately 6
percent, to 51,665 at September 30, 1998 compared to 48,611 at September 30,
1997. No other individual factor was significant to the increases in revenues.
Operating expenses consist primarily of costs associated with the operation
and administration of the Aurora System. The principal cost components are
salaries paid to system personnel, programming expenses, professional fees,
subscriber billing costs, rent for leased facilities, cable system maintenance
expenses and marketing expenses.
Operating expenses increased $369,030, or approximately 14 percent, to
$2,997,425 for the three month period ended September 30, 1998 compared to
$2,628,395 for the comparable 1997 period. Operating expenses increased
$726,000, or approximately 9 percent, to $8,754,851 for the nine months ended
September 30, 1998 compared to $8,028,851 for the comparable 1997 period.
Increases in programming fees primarily accounted for the increases in operating
expenses for the three and nine month periods. No other individual factor
contributed significantly to the increases in operating expenses. Operating
expenses represented 54 percent of revenues for both of the three month periods
ended September 30, 1998 and 1997, and 54 percent and 55 percent, respectively,
of revenues for the nine month periods ended September 30, 1998 and 1997.
The cable television industry generally measures the financial performance
of a cable television system in terms of operating cash flow (revenues less
operating expenses). This measure is not intended to be a substitute or
improvement upon the items disclosed on the financial statements, rather it is
included because it is an industry standard. Operating cash flow increased
$276,051, or approximately 12 percent, to $2,503,469 for the three month period
ended September 30, 1998 compared to $2,227,418 for the comparable 1997 period.
Operating cash flow increased $899,565, or approximately 14
9
<PAGE>
percent, to $7,368,082 for the nine months ended September 30, 1998 compared to
$6,468,517 for the comparable 1997 period. These increases were due to the
increases in revenues exceeding the increases in operating expenses.
Management and supervision fees and allocated overhead from the General
Partners increased $83,144, or approximately 16 percent, to $611,394 for the
three month period ended September 30, 1998 compared to $528,250 for the
comparable 1997 period. Management and supervision fees and allocated overhead
from the General Partners increased $201,720, or approximately 12 percent, to
$1,820,001 for the nine months ended September 30, 1998 compared to $1,618,281
for the comparable 1997 period. These increases were primarily due to the
timing of certain expenses allocated from JIC and to the increases in revenues
upon which such management and supervision fees are based.
Depreciation and amortization expense increased $189,306, or approximately
9 percent, to $2,207,141 for the three month period ended September 30, 1998
compared to $2,017,835 for the comparable 1997 period. This increase was
primarily due to capital additions in 1998. Depreciation and amortization
expense decreased $503,415, or approximately 7 percent, to $6,313,083 for the
nine months ended September 30, 1998 compared to $6,816,498 for the comparable
1997 period. This decrease was primarily due to the maturation of a portion of
the intangible asset base.
Operating loss decreased $3,601, or approximately 1 percent, to $315,066
for the three month period ended September 30, 1998 compared to $318,667 for the
similar 1997 period. This decrease was due to the increase in operating cash
flow exceeding the increases in management and supervision fees and allocated
overhead from the General Partners and depreciation and amortization expense.
Operating loss decreased $1,201,260, or approximately 61 percent, to $765,002
for the nine months ended September 30, 1998 compared to $1,966,262 in 1997.
This decrease was due to the increase in operating cash flow and the decrease in
depreciation and amortization expense exceeding the increase in management and
supervision fees and allocated overhead from the General Partners.
Interest expense decreased $111,332, or approximately 11 percent, to
$891,653 for the three month period ended September 30, 1998 compared to
$1,002,985 for the comparable 1997 period. Interest expense decreased $41,623,
or approximately 1 percent, to $2,786,417 for the nine months ended September
30, 1998 compared to $2,828,040 for the comparable 1997 period. These decreases
were due to lower effective interest rates on interest bearing obligations.
Consolidated loss increased $63,448, or approximately 5 percent, to
$1,357,074 for the three month period ended September 30, 1998 compared to
$1,293,626 for the comparable 1997 period. This increase was primarily due to
the increase in depreciation and amortization expense. Consolidated loss
decreased $1,061,067, or approximately 22 percent, to $3,718,650 for the nine
months ended September 30, 1998 compared to $4,779,717 for the comparable 1997
period. This decrease was due to the factors discussed above.
10
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The sale of the Aurora System was subject to the approval of the holders of a
majority of the limited partnership interests of the Partnership. A vote of the
limited partners was conducted by the Managing General Partner by mail in
September and October 1998. Limited partners of record at the close of business
on August 31, 1998 were entitled to notice of, and to participate in, this vote
of limited partners. Following are the final results of the vote of the limited
partners:
<TABLE>
<CAPTION>
No. of
Interests Approved Against Abstained Did Not Vote
Entitled to ------------- ----------- ------------ --------------
Vote No. % No. % No. % No. %
------------ ------- ---- ------ --- ------ ---- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aurora System Sale 174,343 89,211 51.1 3,315 1.9 3,531 2.0 78,286 45.0
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None
11
<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 II, L.P.
BY: JONES CABLE CORPORATION
its Managing General Partner
By: /S/ Kevin P. Coyle
--------------------------------
Kevin P. Coyle
Group Vice President/Finance
(Principal Financial Officer)
Dated: November 13, 1998
12
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