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FORM 10-K 405
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 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission file number: 0-16183
IDS/JONES GROWTH PARTNERS 87-A, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-1060544
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State of Organization (IRS Employer
Identification No.)
P.O. Box 3309, Englewood, Colorado 80155-3309 (303) 792-3111
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(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
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
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State the aggregate market value of the voting stock held by non-affiliates of
the registrant: N/A
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 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. x
--
DOCUMENTS INCORPORATED BY REFERENCE: None
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PART I.
ITEM 1. BUSINESS
THE PARTNERSHIP. IDS/Jones Growth Partners 87-A, 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 Jones
Intercable, Inc. ("Intercable"), which is also a Colorado corporation and one of
the largest cable television system operators in the nation. 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 was formed for the purpose of acquiring and operating
cable television systems. The Partnership owns the cable television systems
serving the areas in and around the City of Roseville and neighboring portions
of unincorporated Placer County, all in the State of California (the "Roseville
System"), and the cable television systems serving the communities of Carmel,
Ingalls, Fortville and Zionsville, and certain unincorporated areas of Hancock,
Hamilton, Boone and Madison Counties, all in the State of Indiana (the "Carmel
System"). See Item 2. The Carmel System and the Roseville System may
collectively hereinafter be referred to as the "Systems."
CABLE TELEVISION SERVICES. The Systems offer to their subscribers
various types of programming, which include basic service, tier service,
premium service, pay-per-view programs and packages including several of these
services at combined rates.
Basic cable television service usually consists of signals of all four
national television networks, various independent and educational television
stations (both VHF and UHF) and certain signals received from satellites. Basic
service also usually includes programs originated locally by the system, which
may consist of music, news, weather reports, stock market and financial
information and live or videotaped programs of a public service or entertainment
nature. FM radio signals are also frequently distributed to subscribers as part
of the basic service.
The Systems offer tier services on an optional basis to their
subscribers. A tier generally includes most of the cable networks such as
Entertainment and Sports Programming Network (ESPN), Cable News Network (CNN),
Turner Network Television (TNT), Family Channel, Discovery and others, and the
cable television operators buy tier programming from these networks. The
Systems also offer a package that includes the basic service channels and the
tier services.
The Systems also offer premium services to their subscribers, which
consist of feature films, sporting events and other special features that are
presented without commercial interruption. The cable television operators buy
premium programming from suppliers such as HBO, Showtime, Cinemax or others at a
cost based on the number of subscribers the cable operator serves. Premium
service programming usually is significantly more expensive than the basic
service or tier service programming, and consequently cable operators price
premium service separately when sold to subscribers.
The Systems also offer to subscribers pay-per-view programming.
Pay-per-view is a service that allows subscribers to receive single programs,
frequently consisting of motion pictures that have recently completed their
theatrical exhibitions and major sporting events, and to pay for such service
on a program-by-program basis.
REVENUES. Monthly service fees for basic, tier and premium services
constitute the major source of revenue for the Systems. In addition,
advertising sales are becoming a significant source of revenue for the Systems.
As a result of the adoption by the FCC of new rules under the Cable Television
Consumer Protection and Competition Act of 1992 (the "1992 Cable Act"), and
several rate regulation orders, the Systems' rate
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structures for cable programming services and equipment have been revised. See
Regulation and Legislation. At December 31, 1994, the Systems' monthly basic
service rates ranged from $8.23 to $9.43, monthly basic and tier ("basic plus")
service rates ranged from $21.75 to $22.58, and monthly premium services ranged
from $4.00 to $10.00 per premium service. Charges for additional outlets have
been eliminated, and charges for remote controls and converters have been
"unbundled" from the programming service rates. In addition, the Partnership
earns revenues from the Systems' pay-per-view programs and advertising fees.
Related charges may include a nonrecurring installation fee that ranges from
$5.00 to $34.60; however, from time to time the Systems have followed the common
industry practice of reducing or waiving the installation fee during promotional
periods. Commercial subscribers such as hotels, motels and hospitals are
charged a nonrecurring connection fee that usually covers the cost of
installation. Except under the terms of certain contracts with commercial
subscribers and residential apartment and condominium complexes, the subscribers
are free to discontinue the service at any time without penalty. For the year
ended December 31, 1994, of the total fees received by the Systems, basic
service and tier service fees accounted for approximately 65% of total revenues,
premium service fees accounted for approximately 17% of total revenues,
pay-per-view fees were approximately 1% of total revenues, advertising fees were
approximately 9% of total revenues and the remaining 8% of total revenues came
principally from equipment rentals, installation fees and program guide sales.
The Partnership is dependent upon the timely receipt of service fees to provide
for maintenance and replacement of plant and equipment, current operating
expenses and other costs of the Systems.
The Partnership's business consists of providing cable television
services to a large number of customers, the loss of any one of which would have
no material effect on the Partnership's business. Each of the Systems has had
some subscribers who later terminated the service. Terminations occur primarily
because people move to another home or to another city. In other cases, people
terminate on a seasonal basis or because they no longer can afford or are
dissatisfied with the service. The amount of past due accounts in the Systems
is not significant. The Managing General Partner's policy with regard to past
due accounts is basically one of disconnecting service before a past due account
becomes material.
The Partnership does not depend to any material extent on the
availability of raw materials; it carries no significant amounts of inventory
and it has no material backlog of customer orders. The Partnership has no
employees because all properties are managed by employees of Intercable.
Intercable has engaged in research and development activities relating to the
provision of new services but the amount of the Partnership's funds expended for
such research and development has never been material.
Compliance with Federal, state and local provisions that have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has had no material
effect upon the capital expenditures, earnings or competitive position of the
Partnership.
FRANCHISES. The Systems are constructed and operated under
non-exclusive, fixed-term franchises or other types of operating authorities
(referred to collectively herein as "franchises") granted by local governmental
authorities. The Systems' franchises require that franchise fees ranging from
3% of basic revenues to 5% of gross revenues of the cable system be paid to the
governmental authority that granted the franchise, that certain channels be
dedicated to municipal use, that municipal facilities, hospitals and schools be
provided cable service free of charge and that any new cable plant be
substantially constructed within specific periods. (See Item 2 for a range of
franchise expiration dates of the Systems.)
The responsibility for franchising of cable television systems
generally is left to state and local authorities. There are, however, several
provisions in the Communications Act of 1934, as amended, that govern the terms
and conditions under which cable television systems provide service, including
the standards applicable to cable television operators seeking renewal of a
cable television franchise. In addition, the 1992 Cable Act also made several
procedural changes to the process under which a cable operator has not
substantially complied with the material terms of the franchise, has not
provided reasonable service in light of the community's needs, does not have the
financial, legal and technical ability to provide the services being proposed
for the future, or has not presented a reasonable proposal for future service. A
final decision of non-renewal by the franchising authority is
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appealable in court. The Managing General Partner and its affiliates recently
have experienced lengthy negotiations with some franchising authorities for the
granting of franchise renewals and transfers. Some of the issues involved in
recent renewal negotiations include rate reregulation, customer service
standards, cable plant upgrade or replacement and shorter terms of franchise
agreements. The inability of the Partnership to renew a franchise, or lengthy
negotiations or litigation involving the renewal process could have an adverse
impact on the business of the Partnership.
COMPETITION. Cable television systems currently experience
competition from several sources, but two technologies, Multichannel Multipoint
Distribution Service ("MMDS") systems, commonly called wireless cable systems,
and Direct Broadcast Satellite ("DBS") systems, which distribute programming to
home satellite dishes, currently pose the greatest potential threat to the
cable television industry.
MMDS systems will likely focus on providing service to residents of
rural areas that are not served by cable television systems, but providers of
programming via MMDS systems will generally have the potential to compete
directly with cable television systems in urban areas as well, and in some areas
of the country, MMDS systems are now in direct competition with cable television
systems. To date, the Partnership has not lost a significant number of
subscribers, nor a significant amount of revenue, to MMDS operators competing
with its cable television systems.
DBS operators deliver premium channel services and specialized
programming to subscribers by high-powered DBS satellites on a wide-scale basis,
and two major companies began operations in 1994. Subscribers are able to
receive DBS services virtually anywhere in the United States with a rooftop or
wall-mounted antenna. In some instances, DBS systems may serve as a complement
to cable television operations by enabling cable television operators to offer
additional channels of programming without the construction of additional cable
plant. DBS companies use video compression technology to increase the channel
capacity of their satellite systems to provide a wide variety of program
services that are competitive with those of cable television systems.
Cable television systems also compete with broadcast television,
private cable television systems known as Master Antenna Television ("MATV"),
Satellite Master Antenna Television ("SMATV") and Television Receive-Only Earth
Stations ("TVRO"). MATV and SMATV generally serve multi-unit dwellings such as
condominiums, apartment complexes and private residential communities, and
TVROs are satellite receiving antenna dishes that are used by "backyard users."
There is also potential competition from an emerging technology, Local
Multipoint Distribution Service ("LMDS"). When it is authorized for service,
the LMDS, sometimes referred to as cellular television, could have the
capability of delivering approximately 50 channels, or if two systems were
combined 100 channels, of video programming to a subscriber's home, which
capacity could be increased by using video compression technology. The Managing
General Partner believes that there are not any current fully operational LMDS
systems.
Although the Systems have not yet encountered competition from a
telephone company entering into the business of providing video services to
subscribers, the Systems could potentially face competition from telephone
companies doing so. A Federal cross-ownership restriction has historically
limited entry into the cable television business by potentially strong
competitors such as telephone companies. This restriction, which is contained
in the 1984 Cable Act, has generally prohibited telephone companies from owning
or operating cable television systems within their own telephone service areas,
but several recent court decisions have eliminated this restriction. In
addition, the FCC is authorizing telephone companies to provide video dialtone
service within their service areas. Legislation is also pending in Congress
that would permit telephone companies to provide video programming through
separate subsidiaries. The Managing General Partner cannot predict at this time
to what extent current restrictions will be modified to permit telephone
companies to provide cable television services within their own service areas in
competition with cable television systems. See Regulation and Legislation,
Ownership and Market Structure for a description of the potential participation
of the telephone industry in the delivery of cable television services. Entry
into the market by telephone companies as direct competitors of the
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Systems could adversely impact the profitability of the Systems. If a telephone
company were to become a direct competitor of the Partnership in an area served
by a Partnership System, the Partnership could be at a competitive disadvantage
because of the relative financial strength of a telephone company compared to
the Partnership. Depending on a number of factors, such competition could also
result in cable television systems providing the same types of services now
provided by the telephone industry.
The FCC has established a new wireless telecommunications service
known as Personal Communications Service ("PCS"). It is envisioned that PCS
would provide portable non-vehicular mobile communications services similar to
that available from cellular telephone companies, but at a lower cost. PCS
would be delivered by placing numerous microcells in a particular area to be
covered, accessible to both residential and business customers. Because of the
need to link the many microcells necessary to deliver this service economically,
many parties are investigating integration of PCS with cable television
operations. Several cable television multiple systems operators and others,
including affiliates of Intercable, hold or have requested experimental licenses
from the FCC to test PCS technology.
Cable television franchises are not exclusive, so that more than one
cable television system may be built in the same area (known as an "overbuild"),
with potential loss of revenues to the operator of the original cable television
system. The Systems currently face no direct competition from other cable
television operators.
COMPETITION FOR SUBSCRIBERS IN THE PARTNERSHIP'S SYSTEMS. Following
is a summary of competition from DBS, MMDS, SMATV and TVRO operators in the
Systems' franchise areas:
Carmel System: An MMDS operator has announced plans
to activate a 35-channel system during
1995. There is one SMATV operator
that provides service to 314 multiple
dwelling units and a TVRO operator
that provides service to 51 units.
Ameritech has announced plans to build
a cable television system in the
Naperville, Illinois area and to
extend into several other communities,
including the system's service area,
within the next few years. Ameritech
represents significant potential
competition.
Roseville System: There is one MMDS operator and 4 TVRO
dealers in the system's service area
that provide minimal competition.
There are 4 SMATV operators that
service multi-unit dwellings and
provide minimal competition. DBS
service is available in the system's
service area but currently it provides
only minimal competition.
REGULATION AND LEGISLATION. The cable television industry is
regulated through a combination of the Federal Communications Commission
("FCC"), some state governments, and most local governments. In addition, the
Copyright Act of 1976 imposes copyright liability on all cable television
systems. Cable television operations are subject to local regulation insofar as
systems operate under franchises granted by local authorities.
Cable Television Consumer Protection and Competition Act of 1992. On
October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"), which became effective on
December 4, 1992. This legislation has caused significant changes to the
regulatory environment in which the cable television industry operates. The
1992 Cable Act generally allows for a greater degree of regulation of the cable
television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable television systems in the United States, including
those owned and managed by Intercable, are subject to rate regulation of basic
cable services. In addition, the 1992 Cable Act allows the FCC to regulate
rates for non-basic service tiers other than premium services in response to
complaints filed by franchising authorities and/or cable subscribers. In
April 1993, the FCC adopted regulations governing rates for basic and
non-basic services. The FCC's rules became effective on September 1, 1993.
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In compliance with these rules, the Partnership reduced rates charged
for certain regulated services effective September 1, 1993. These reductions
resulted in some decrease in revenues and operating income before depreciation
and amortization; however, the decrease was not as severe as originally
anticipated. The Partnership has undertaken actions to mitigate a portion of
these reductions primarily through (a) new service offerings in some systems,
(b) product re-marketing and re-packaging and (c) marketing efforts directed at
non-subscribers.
On February 22, 1994, however, the FCC adopted several additional rate
orders including an order which revised its earlier-announced regulatory
scheme with respect to rates. The FCC's new regulations generally require rate
reductions, absent a successful cost-of-service showing, of 17% of September
30, 1992 rates, adjusted for inflation, channel modifications, equipment costs,
and increases in programming costs. However, the FCC held rate reductions in
abeyance in certain systems. The new regulations became effective on May 15,
1994, but operators could elect to defer rate reductions to July 14, 1994, so
long as they made no changes in their rates and did not restructure service
offerings between May 15 and July 14.
On February 22, 1994, the FCC also adopted interim cost-of-service
regulations. Rate reductions will not be required where it is successfully
demonstrated that rates for basic and other regulated programming services are
justified and reasonable using cost-of-service standards. The FCC established
an interim industry-wide 11.25% permitted rate of return, and requested
comments on whether this standard and other interim cost-of-service standards
should be made permanent. The FCC also established a presumption that
acquisition costs above a system's book value should be excluded from the rate
base, but the FCC will consider individual showings to rebut this presumption.
The need for special rate relief will also be considered by the FCC if an
operator demonstrates that the rates set by a cost-of-service proceeding would
constitute confiscation of investment, and that, absent a higher rate, the
return necessary to operate and to attract investment could not be maintained.
The FCC will establish a uniform system of accounts for operators that elect
cost-of-service rate regulation, and the FCC has adopted affiliate transaction
regulations. After a rate has been set pursuant to a cost-of-service showing,
rate increases for regulated services will be indexed for inflation, and
operators will also be permitted to increase rates in response to increases in
costs beyond their control, such as taxes and increased programming costs.
After analyzing the effects of the two methods of rate regulation, the
Partnership complied with the new benchmark regulations and further reduced
rates in its operating systems effective July 1994. The Partnership will
continue its efforts to mitigate the effect of such rate reductions.
Among other issues addressed by the FCC in its February 1994 rate
orders was the treatment of packages of a la carte channels. The FCC in its
rate regulations adopted April 1, 1993, exempted from rate regulation the price
of packages of a la carte channels upon the fulfillment of certain conditions.
On November 10, 1994, the FCC reversed its policy regarding rate regulation of
packages of a la carte services. A la carte services that are offered in a
package will now be subject to rate regulation by the FCC, although the FCC
indicated that it cannot envision circumstances in which any price for a
collective offering of premium channels that have traditionally been offered on
a per-channel basis would be found to be unreasonable.
On November 10, 1994, the FCC also announced a revision to its
regulations governing the manner in which cable operators may charge
subscribers for new cable programming services. In addition to the present
formula for calculating the permissible rate for new services, the FCC
instituted a three-year flat fee mark-up plan for charges relating to new
channels of cable programming services. Commencing on January 1, 1995,
operators may charge for new channels of cable programming services added after
May 14, 1994 at a rate of up to 20 cents per channel, but may not make
adjustments to monthly rates totaling more than $1.20 plus an additional 30
cents for programming license fees per subscriber over the first two years of
the three-year period for these new services. Operators may charge an
additional 20 cents in the third year only for channels added in that year plus
the costs for the programming. Operators electing to use the 20 cent per
channel adjustment may not also take a 7.5% mark-up on programming cost
increases, which is permitted under the FCC's current rate regulations. The
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FCC has requested further comment as to whether cable operators should continue
to receive the 7.5% mark-up on increases in license fees on existing
programming services.
The FCC also announced that it will permit operators to offer a "new
product tier" ("NPT"). Operators will be able to price this tier as they elect
so long as, among other conditions, other channels that are subject to rate
regulation are priced in conformity with applicable regulations and operators
do not remove programming services from existing tiers and offer them on the
NPT.
There have been several lawsuits filed by cable operators and
programmers in Federal court challenging various aspects of the 1992 Cable Act,
including provisions relating to mandatory broadcast signal carriage,
retransmission consent, access to cable programming, rate regulations,
commercial leased channels and public access channels. On April 8, 1993, a
three-judge Federal district court panel issued a decision upholding the
constitutionality of the mandatory signal carriage requirements of the 1992
Cable Act. That decision was appealed directly to the United States Supreme
Court. The United States Supreme Court vacated the lower court decision on
June 27, 1994 and remanded the case to the district court for further
development of a factual record. The Court's majority determined that the
must-carry rules were content neutral, but that it was not yet proven that the
rules were needed to preserve the economic health of the broadcasting industry.
In the interim, the must-carry rules will remain in place during the pendency
of the proceedings in district court. In 1993, a Federal district court for
the District of Columbia upheld provisions of the 1992 Cable Act concerning
rate regulation, retransmission consent, restrictions on vertically integrated
cable television operators and programmers, mandatory carriage of programming
on commercial leased channels and public, educational and governmental access
channels and the exemption for municipalities from civil damage liability
arising out of local regulation of cable services. The 1992 Cable Act's
provisions providing for multiple ownership limits for cable operators and
advance notice of free previews for certain programming services have been
found unconstitutional. In November 1993, the United States Court of Appeals
for the District of Columbia held that the FCC's regulations implemented
pursuant to Section 10 of the 1992 Cable Act, which permit cable operators to
ban indecent programming on public, educational or governmental access channels
or leased access channels, were unconstitutional, but the court has agreed to
reconsider its decision. All of these decisions construing provisions of the
1992 Cable Act and the FCC's implementing regulations have been or are expected
to be appealed.
Ownership and Market Structure. The FCC rules and Federal law
generally prohibit the direct or indirect common ownership, operation, control
or interest in a cable television system, on the one hand, and a local
television broadcast station whose television signal reaches any portion of the
community served by the cable television system, on the other hand. The FCC
recently lifted its ban on the cross-ownership of cable television systems by
broadcast networks. The FCC revised its regulations to permit broadcast
networks to acquire cable television systems serving up to 10% of the homes
passed in the nation, and up to 50% of the homes passed in a local market.
Neither the Partnership nor Intercable nor the Managing General Partner has any
direct or indirect ownership, operation, control or interest in a television
broadcast station, or a telephone company, and they are thus presently
unaffected by the cross-ownership rules.
The Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
FCC regulations generally prohibit the common operation of a cable television
system and a telephone company within the same service area. Until recently, a
provision of a Federal court antitrust consent decree also prohibited the
regional Bell operating companies ("RBOCs") from engaging in cable television
operations. This prohibition was recently removed when the court retaining
jurisdiction over the consent decree ruled that the RBOCs could provide
information services over their facilities. This decision permits the RBOCs to
acquire or construct cable television systems outside of their own service
areas.
The 1984 Cable Act prohibited local exchange carriers, including the
RBOCs, from providing video programming directly to subscribers within their
local exchange telephone service areas, except in rural areas or by specific
waiver of FCC rules. Several Federal district courts have struck down the 1984
Cable Act's telco/cross-ownership provision as facially invalid and
inconsistent with the First Amendment. The United States Courts of Appeals for
the Fourth and the Ninth Circuits have upheld the appeals of two of these
district court decisions, and the United States Justice Department is expected
to request the United States Supreme Court to
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review these two decisions. This Federal cross-ownership rule is particularly
important to the cable industry since these telephone companies already own
certain facilities needed for cable television operation, such as poles, ducts
and associated rights-of-way.
The FCC amended its rules in 1992 to permit local telephone companies
to offer "video dialtone" service for video programmers, including channel
capacity for the carriage of video programming and certain noncommon carrier
activities such as video processing, billing and collection and joint marketing
arrangements. In its video dialtone order, which was part of a comprehensive
proceeding examining whether and under what circumstances telephone companies
should be allowed to provide cable television services, including video
programming to their customers, the FCC concluded that neither the 1984 Cable
Act nor its rules apply to prohibit the interexchange carriers (i.e., long
distance telephone companies such as AT&T) from providing such services to
their customers. Additionally, the FCC also concluded that where a local
exchange carrier ("LEC") makes its facilities available on a common carrier
basis for the provision of video programming to the public, the 1984 Cable Act
does not require the LEC or its programmer customers to obtain a franchise to
provide such service. This aspect of the FCC's video dialtone order was upheld
on appeal by the United States Court of Appeals for the D.C. Circuit. The FCC
recently issued an order reaffirming its initial decision, and this order has
been appealed. Because cable operators are required to bear the costs of
complying with local franchise requirements, including the payment of franchise
fees, the FCC's decision could place cable operators at a competitive
disadvantage vis-a-vis services offered on a common carrier basis over local
telephone company provided facilities. In its Reconsideration Order, the FCC,
among other actions, refused to require telephone companies to justify cost
allocations prior to the construction of video dialtone facilities, and
indicated that it would provide guidance on costs that must be included in
proposed video dialtone tariffs. The FCC also established dual Federal/state
jurisdiction over video dialtone services based on the origination point of the
video dialtone programming service. In a separate proceeding, the FCC has
proposed to increase the numerical limit on the population of areas qualifying
as "rural" and in which LECs can provide cable service without a FCC waiver.
On January 12, 1995, the FCC adopted a Fourth Further Notice of
Proposed Rulemaking in its video dialtone docket. The FCC tentatively
concluded that it should not ban telephone companies from providing their own
video programming over their video dialtone platforms in those areas in which
the cable/telephone cross-ownership rules have been found unconstitutional.
The FCC requested comments on this issue and on further refinements of its
video dialtone regulatory framework concerning, among other issues, telephone
programmer affiliation standards, the establishment of structural safeguards to
prevent cross-subsidization of video dialtone and programming activities, and
the continuation of the FCC's ban prohibiting telephone companies from
acquiring cable systems within their telephone service areas for the provision
of video dialtone services. The FCC will also consider whether a LEC offering
video dialtone service must secure a local franchise if that LEC also engages
in the provision of video programming carried on its video dialtone platform.
The FCC has also proposed to broadly interpret its authority to waive the
cable/telephone cross-ownership ban upon a showing by telephone companies that
they comply with the safeguards which the FCC establishes as a condition of
providing video programming.
A number of bills that would have permitted telephone companies to
provide cable television service within their own service areas were considered
during the last Congress, but none were adopted. These bills would have
permitted the provision of cable television service by telephone companies in
their own service areas conditioned on the establishment of safeguards to
prevent cross-subsidization between telephone and cable television operations
and the provision of telecomunication services by cable television systems.
Similar legislation is expected to be considered by Congress during its current
session. The outcome of these FCC, legislative or court proceedings and
proposals or the effect of such outcome on cable system operations cannot be
predicted.
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ITEM 2. PROPERTIES
The cable television systems owned by the Partnership at December 31,
1994 are described below:
<TABLE>
<CAPTION>
SYSTEM ACQUISITION DATE
------ ----------------
<S> <C>
Roseville April 1988
Carmel February 1989
</TABLE>
The following sets forth (i) the monthly basic plus service rates
charged to subscribers, (ii) the number of basic subscribers and pay units and
(iii) the range of franchise expiration dates for the Systems. The monthly
basic service rates set forth herein represent, with respect to systems with
multiple headends, the basic service rate charged to the majority of the
subscribers within the system. While the charge for basic plus service may
have increased in 1993 in some cases as a result of the FCC's rate regulations,
overall revenues may have decreased due to the elimination of charges for
additional outlets and certain equipment. In cable television systems, basic
subscribers can subscribe to more than one pay TV service. Thus, the total
number of pay services subscribed to by basic subscribers are called pay units.
As of December 31, 1994, the Systems operated approximately 800 miles of cable
plant, passing approximately 46,000 homes, representing an approximate 75%
penetration rate. Figures for numbers of subscribers, miles of cable plant and
homes passed are compiled from the Managing General Partner's records and may
be subject to adjustments.
<TABLE>
<CAPTION>
At December 31,
-----------------------------------------
ROSEVILLE, CALIFORNIA 1994 1993 1992
- - - --------------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $ 21.75 $ 22.46 $ 19.95
Basic subscribers 14,946 13,618 12,898
Pay units 10,733 8,578 9,267
</TABLE>
Franchise expiration dates range from December 1999 to December 2000.
<TABLE>
<CAPTION>
At December 31,
----------------------------------------
CARMEL, INDIANA 1994 1993 1992
- - - --------------- ---- ---- ----
<S> <C> <C> <C>
Monthly basic plus service rate $ 22.58 $ 22.65 $ 22.20
Basic subscribers 18,156 17,125 16,400
Pay units 13,697 13,157 12,060
</TABLE>
Franchise expiration dates range from July 1997 to December 2007.
PROGRAMMING SERVICES
Programming services provided by the Systems include local affiliates
of the national broadcast networks, local independent broadcast channels, the
traditional satellite services (e.g., American Movie Classics, Arts &
Entertainment, Black Entertainment Network, C-SPAN, The Discovery Channel,
Lifetime, Entertainment Sports Network, Home Shopping Network, Mind Extension
University, Music Television, Nickelodeon, Turner Network Television, The
Nashville Network, Video Hits One, and superstations WOR, WGN and TBS. The
Partnership's Systems also provide a selection, which varies by system, of
premium channel programming (e.g., Cinemax, Encore, Home Box Office, Showtime
and The Movie Channel).
ITEM 3. LEGAL PROCEEDINGS
None.
-9-
<PAGE> 10
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 February 15, 1995, the approximate number of
equity security holders in the Partnership was 6,359.
-10-
<PAGE> 11
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------------------
1994 1993 1992 1991 1990
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $13,082,094 $12,251,764 $11,160,962 $10,169,251 $ 8,934,134
Operating, General and
Administrative Expenses 7,298,356 6,476,534 5,726,675 5,321,568 4,267,821
Management and Supervision Fees
and Allocated Overhead from
General Partners 1,737,106 1,590,738 1,452,321 1,240,751 1,154,444
Depreciation and Amortization 5,645,264 6,007,116 5,981,609 6,204,296 5,654,353
Operating Loss (1,598,632) (1,822,624) (1,999,643) (2,597,364) (2,142,484)
Net Loss (2,994,486) (2,879,606) (3,195,844) (4,227,955) (4,194,450)
Net Loss per
Limited Partnership Unit (18.06) (17.36) (19.27) (25.49) (25.29)
Weighted Average Number of
Limited Partnership
Units Outstanding 164,178 164,178 164,178 164,178 164,178
General Partners' Deficit (229,814) (199,869) (171,073) (139,115) (96,835)
Limited Partners' Capital 13,483,104 16,447,645 19,298,455 22,462,341 26,648,016
Total Assets 36,683,823 39,507,610 43,454,780 44,643,600 48,370,888
Debt 21,832,052 22,208,312 23,086,835 21,638,568 20,628,761
Managing General Partner
Advances 665,782 - 238,198 - 190,050
</TABLE>
11
<PAGE> 12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
1994 Compared to 1993
Revenues of IDS/Jones Growth Partners 87-A, Ltd. (the "Partnership")
increased $830,330, or approximately 7 percent, from $12,251,764 in 1993 to
$13,082,094 in 1994. Advertising revenues accounted for approximately 60
percent of the increase in revenues. An increase in basic subscribers
accounted for approximately 21 percent of the increase in revenues. The
increase in revenues would have been greater but for the reduction in basic
rates due to basic rate regulations issued by the FCC in April 1993 and
February 1994 with which the Partnership complied effective September 1993 and
July 1994, respectively.
Operating, general and administrative expenses increased $821,822, or
approximately 13 percent, from $6,476,534 in 1993 to $7,298,356 in 1994.
Operating, general and administrative expense consumed 53 percent and 56
percent of revenue during the years ended December 31, 1993 and 1994,
respectively. Increases in programming fees, due in part to the expansion of
the subscriber base, accounted for approximately 31 percent of the increase in
such expenses. Advertising expenses accounted for approximately 27 percent of
the increase in operating, general and administrative expenses. No other
individual factor significantly affected the increase in operating, general and
administrative expenses. Management and supervision fees and allocated
overhead from the General Partners increased $146,368, or approximately 9
percent, from $1,590,738 in 1993 to $1,737,106 in 1994. This increase was due
to the increase in revenues, upon which such fees and allocations are based,
and an increase in allocated expenses from the Managing General Partner. The
Managing General Partner has experienced increases in expenses, including
personnel costs and reregulation costs, a portion of which are allocated to the
Partnership. Depreciation and amortization decreased $361,852, or
approximately 6 percent, from $6,007,116 in 1993 to $5,645,264 in 1994. This
decrease is due to the maturation of the Partnership's depreciable asset base.
Operating loss decreased $223,992, or approximately 12 percent, from
$1,822,624 in 1993 to $1,598,632 in 1994. This decrease is due to the increase
in revenues and the decrease in depreciation and amortization expense exceeding
the increases in operating, general and administrative expense, management and
supervision fees and allocated overhead from the General Partners. Operating
income before depreciation and amortization expense decreased $137,860, or
approximately 3 percent, from $4,184,492 in 1993 to $4,046,632 in 1994 due to
the increase in operating, general and administrative expense and management
and supervision fees and allocated overhead from the General Partners exceeding
the increase in revenues. The decrease in operating income before depreciation
and amortization reflects the current operating environment of the cable
television industry. The FCC rate regulations under the 1992 Cable Act have
caused revenues to increase more slowly than otherwise would have been the
case. In turn, this has caused certain expenses which are a function of
revenue, such as franchise fees, copyright fees and management fees, to
increase more slowly than in prior years. However, other operating costs such
as programming fees, salaries and benefits, and marketing costs as well as
other costs incurred by the General Partner, which are allocated to the
Partnership, continue to increase at historical rates. This situation has led
to reductions in operating income before depreciation and amortization as a
percent of revenue ("Operating Margin"). Such reductions in Operating Margins
may continue in the near term as the Partnership and the General Partner incur
cost increases due to, among other things, increases in programming fees,
compliance costs associated with reregulation and competition, that exceed
increases in revenue. The General Partner will attempt to mitigate a portion
of these reductions through (a) new service offerings, (b) product re-marketing
and re-packaging and (c) marketing efforts targeted at non-subscribers.
Interest expense increased $291,476, or approximately 27 percent, from
$1,082,480 in 1993 to $1,373,956 in 1994. This increase is due primarily to
higher effective interest rates on outstanding interest bearing obligations
during 1994.
Net loss increased $114,880, or approximately 4 percent, from $2,879,606
in 1993 to $2,994,486 in 1994 due primarily to the increase in interest expense
exceeding the decrease in operating loss. These losses, which are primarily
the result of the factors discussed above, are expected to continue in the
future.
1993 Compared to 1992
Revenues of the Partnership increased $1,090,802, or approximately 10
percent, from $11,160,962 in 1992 to $12,251,764 in 1993. An increase in basic
subscribers and basic service rate adjustments accounted for approximately 40
12
<PAGE> 13
percent and 34 percent, respectively, of the increase in revenues. Advertising
revenues accounted for approximately 26 percent of the increase in revenues.
The increase in revenues would have been greater but for the reduction in basic
rates due to new basic rate regulations issued by the FCC in April 1993 with
which the Partnership complied effective September 1993.
Operating, general and administrative expenses increased $749,859, or
approximately 13 percent, from $5,726,675 in 1992 to $6,476,534 in 1993.
Operating, general and administrative expense consumed 51 percent and 53
percent of revenue during the years ended December 31, 1992 and 1993,
respectively. Increases in programming fees, due in part to the expansion of
the subscriber base, accounted for approximately 33 percent of the increase in
such expenses. Plant related expenses and advertising expenses accounted for
approximately 25 percent and 20 percent, respectively, of the increase in
operating, general, and administrative expenses. No other individual factor
significantly affected the increase in operating, general and administrative
expenses. Management and supervision fees and allocated overhead from the
General Partners increased $138,417, or approximately 10 percent, from
$1,452,321 in 1992 to $1,590,738 in 1993. This increase was due to the
increase in revenues, upon which such fees and allocations are based, and an
increase in allocated expenses. Depreciation and amortization increased
$25,507, or less than one percent, from $5,981,609 in 1992 to $6,007,116 in
1993. This increase was due to capital additions during 1992 and 1993, which
was offset, in part, by a reduction in amortization expense due to the
maturation of certain intangible assets.
Operating loss decreased $177,019, or approximately 9 percent, from
$1,999,643 in 1992 to $1,822,624 in 1993. This decrease is due to the increase
in revenues exceeding the increases in operating, general and administrative
expense, management and supervision fees and allocated overhead from the
General Partners and depreciation and amortization expense. Operating income
before depreciation and amortization expense increased $202,526, or
approximately 5 percent, from $3,981,966 in 1992 to $4,184,492 in 1993 due to
the increase in revenues exceeding the increases in operating, general and
administrative expense and management and supervision fees and allocated
overhead from the General Partners.
Interest expense decreased $117,910, or approximately 10 percent, from
$1,200,390 in 1992 to $1,082,480 in 1993. This decrease was due primarily to
lower effective interest rates and lower outstanding balances on outstanding
interest bearing obligations during 1993.
Net loss decreased $316,238, or approximately 10 percent, from $3,195,844
in 1992 to $2,879,606 in 1993 due primarily to the decrease in operating loss
and the decrease in interest expense. These losses were primarily the result
of the factors discussed above.
Financial Condition
The Partnership expended approximately $3,175,000 in capital
improvements during 1994. Of these improvements, approximately 38 percent
related to the construction of cable television plant and approximately 10
percent related to rebuilds and upgrades of the Partnership's cable television
systems. Approximately 17 percent related to service drops to homes. The
remaining expenditures related to various system enhancements in each of the
Partnership's systems. Funding for these expenditures was provided by cash on
hand and cash generated from operations.
Anticipated capital expenditures for 1995 are approximately
$2,800,000. Construction of system extensions will account for approximately
41 percent of these expenditures. Service drops to home will account for
approximately 23 percent of the anticipated expenditures. The remainder of the
expenditures relate to various enhancements in each of the Partnership's
systems. Funding for these expenditures is expected to be provided by cash on
hand and cash generated from operations and, if available, borrowings available
under a renegotiated credit facility, as discussed below.
In February 1989, the Partnership entered into a revolving credit and
term loan agreement. At December 31, 1992, the then-outstanding balance of
$23,000,000 was converted to a term loan, payable in 28 consecutive quarterly
installments which began March 31, 1993. The Managing General Partner obtained
waivers of the scheduled March 31, 1994 and June 30, 1994 principal payments to
provide liquidity for capital expenditures. The Partnership paid $345,000 in
loan repayment installments during 1994. At December 31, 1994, the outstanding
balance on the term loan was $21,735,000. The Managing General Partner
renegotiated with the Partnership's lenders to establish a revolving credit
facility with a maximum amount available of $23,000,000. The new revolving
credit facility converts to a term loan on September 30, 1995, payable in 18
consecutive quarterly installments with the final installment due December 31,
1999. Interest is at the Partnership's option of the Prime rate plus .25
percent, the London Interbank Offered Rate plus 1.25
13
<PAGE> 14
percent or the CD rate plus 1.5 percent.
On January 12, 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $10,000,000. The agreement
protects the Partnership for LIBOR interest rates that exceed 7 percent for
three years from the date of the agreement.
The General Partners believe that the Partnership has, and will
continue to have, sufficient sources of capital available in the form of cash
on hand, borrowings from the new revolving credit facility and its ability to
create cash reserves from operations to meet its presently anticipated
obligations.
Regulation and Legislation
On October 5, 1992, Congress enacted the Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act"), which became
effective on December 4, 1992. The 1992 Cable Act generally allows for a
greater degree of regulation of the cable television industry. In April 1993,
the FCC adopted regulations governing rates for basic and non-basic services.
These regulations became effective on September 1, 1993. Such regulations
caused reductions in rates for certain regulated services. On February 22,
1994, the FCC adopted several additional rate orders including an order which
revised its earlier-announced regulatory scheme with respect to rates. The
Partnership complied with the February 1994 benchmark regulations and further
reduced rates in its systems effective July 1994. See Item 1 for further
discussion of the provisions of the 1992 Cable Act and the FCC regulations
promulgated thereunder.
14
<PAGE> 15
Item 8. Financial Statements
IDS/JONES GROWTH PARTNERS 87-A, LTD.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1994 AND 1993
INDEX
<TABLE>
<CAPTION>
Page
--------
<S> <C>
Report of Independent Public Accountants 16
Balance Sheets 17
Statements of Operations 19
Statements of Partners' Capital (Deficit) 20
Statements of Cash Flows 21
Notes to Financial Statements 22
</TABLE>
15
<PAGE> 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of IDS/Jones Growth Partners 87-A, Ltd.:
We have audited the accompanying balance sheets of IDS/JONES GROWTH
PARTNERS 87-A, LTD. (a Colorado limited partnership) as of December 31, 1994
and 1993, and the related statements of operations, partners' capital (deficit)
and cash flows for each of the three years in the period ended December 31,
1994. These financial statements are the responsibility of the General
Partners' 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 87-A, Ltd. as of December 31, 1994, and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado,
March 8, 1995.
16
<PAGE> 17
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
----------------------------------
ASSETS 1994 1993
------ ------------ ------------
<S> <C> <C>
CASH $ 407,610 $ 969,416
TRADE RECEIVABLES, less allowance for
doubtful receivables of $17,015 and $14,267
at December 31, 1994 and 1993, respectively 498,516 320,887
INVESTMENT IN CABLE TELEVISION PROPERTIES:
Property, plant and equipment, at cost 31,848,280 28,673,415
Less- accumulated depreciation (12,685,653) (10,408,482)
------------ ------------
19,162,627 18,264,933
Franchise costs, net of accumulated
amortization of $17,671,439 and $15,140,951
at December 31, 1994 and 1993, respectively 11,195,969 13,620,949
Subscriber lists, net of accumulated
amortization of $4,177,945 and $3,486,041
at December 31, 1994 and 1993, respectively 197,955 889,859
Costs in excess of interests in net assets purchased,
net of accumulated amortization of $924,122 and
$778,421 at December 31, 1994 and 1993, respectively 4,903,915 5,049,616
------------ ------------
Total investment in cable television properties 35,460,466 37,825,357
DEPOSITS, PREPAID EXPENSES AND DEFERRED CHARGES 317,231 391,950
------------ ------------
Total assets $ 36,683,823 $ 39,507,610
=========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
17
<PAGE> 18
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
BALANCE SHEETS
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
December 31,
------------------------------------
LIABILITIES: 1994 1993
------------ ------------
<S> <C> <C>
Debt $ 21,832,052 $ 22,208,312
Accounts payable-
Trade 65,095 43,541
Managing General Partner 665,782 -
Accrued liabilities 828,923 924,024
Subscriber prepayments 38,681 83,957
------------ ------------
Total liabilities 23,430,533 23,259,834
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 7)
PARTNERS' CAPITAL (DEFICIT):
General Partners-
Contributed capital 500 500
Accumulated deficit (230,314) (200,369)
------------ ------------
(229,814) (199,869)
------------ ------------
Limited Partners-
Net contributed capital
(164,178 units outstanding at
December 31, 1994 and 1993) 35,824,200 35,824,200
Accumulated deficit (22,341,096) (19,376,555)
------------ ------------
13,483,104 16,447,645
------------ ------------
Total liabilities and partners'
capital (deficit) $ 36,683,823 $ 39,507,610
=========== ===========
</TABLE>
The accompanying notes to financial statements
are an integral part of these balance sheets.
18
<PAGE> 19
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $13,082,094 $12,251,764 $11,160,962
COSTS AND EXPENSES:
Operating, general
and administrative 7,298,356 6,476,534 5,726,675
Management and supervision
fees and allocated overhead
from General Partners 1,737,106 1,590,738 1,452,321
Depreciation and
amortization 5,645,264 6,007,116 5,981,609
----------- ----------- -----------
OPERATING LOSS (1,598,632) (1,822,624) (1,999,643)
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (1,373,956) (1,082,480) (1,200,390)
Other, net (21,898) 25,498 4,189
----------- ----------- -----------
Total other income
(expense) (1,395,854) (1,056,982) (1,196,201)
----------- ----------- -----------
NET LOSS $(2,994,486) $(2,879,606) $(3,195,844)
========== ========== ==========
ALLOCATION OF NET LOSS:
General Partners $ (29,945) $ (28,796) $ (31,958)
========== ========== ==========
Limited Partners $(2,964,541) $(2,850,810) $(3,163,886)
========== ========== ==========
NET LOSS PER LIMITED
PARTNERSHIP UNIT $ (18.06) $ (17.36) $ (19.27)
========== ========== ==========
WEIGHTED AVERAGE NUMBER OF LIMITED
PARTNERSHIP UNITS OUTSTANDING 164,178 164,178 164,178
========== ========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
19
<PAGE> 20
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
GENERAL PARTNERS:
Jones Cable Corporation
Balance, beginning of year $ (99,935) $ (85,537) $ (69,558)
Net loss for year (14,972) (14,398) (15,979)
---------- ---------- ----------
Balance, end of year $ (114,907) $ (99,935) $ (85,537)
========== ========== ==========
IDS Cable Corporation
Balance, beginning of year $ (99,934) $ (85,536) $ (69,557)
Net loss for year (14,973) (14,398) (15,979)
---------- ---------- ----------
Balance, end of year $ (114,907) $ (99,934) $ (85,536)
========== ========== ==========
Total
Balance, beginning of year $ (199,869) $ (171,073) $ (139,115)
Net loss for year (29,945) (28,796) (31,958)
---------- ---------- ----------
Balance, end of year $ (229,814) $ (199,869) $ (171,073)
========== ========== ==========
LIMITED PARTNERS:
Balance, beginning of year $16,447,645 $19,298,455 $22,462,341
Net loss for year (2,964,541) (2,850,810) (3,163,886)
---------- ---------- ----------
Balance, end of year $13,483,104 $16,447,645 $19,298,455
========== ========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
20
<PAGE> 21
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,994,486) $(2,879,606) $(3,195,844)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 5,645,264 6,007,116 5,981,609
Amortization of interest rate protection contract 33,336 33,328 -
Decrease (increase) in trade receivables (177,629) (109,962) 45,134
Decrease (increase) in deposits, prepaid expenses
and deferred charges 41,383 (23,511) (134,663)
Increase (decrease) in accounts
payable, accrued liabilities and
subscriber prepayments (118,823) 49,157 320,559
Increase (decrease) in amount due
Managing General Partner 665,782 (238,198) 238,198
---------- ---------- ----------
Net cash provided by operating
activities 3,094,827 2,838,324 3,254,993
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,174,865) (2,649,706) (2,984,214)
Franchise renewal costs (105,508) - -
---------- ---------- ----------
Net cash used in investing
activities (3,280,373) (2,649,706) (2,984,214)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 36,298 96,423 1,528,386
Repayment of debt (412,558) (974,946) (80,119)
Purchase of interest rate protection contract - (100,000) -
---------- ---------- ----------
Net cash provided by (used in) financing
activities (376,260) (978,523) 1,448,267
---------- ---------- ----------
Increase (decrease) in cash (561,806) (789,905) 1,719,046
Cash, beginning of year 969,416 1,759,321 40,275
---------- ---------- ----------
Cash, end of year $ 407,610 $ 969,416 $ 1,759,321
========== ========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ 1,256,215 $ 1,130,652 $ 1,132,453
========== ========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
21
<PAGE> 22
IDS/JONES GROWTH PARTNERS 87-A, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION AND PARTNERS' INTERESTS
Formation and Business
IDS/Jones Growth Partners 87-A, Ltd. (the "Partnership"), a Colorado
limited partnership, was formed on September 15, 1987, 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" and manager of the Partnership. IDS Cable
Corporation, a Minnesota corporation, is the "Supervising General Partner".
Jones Intercable, Inc. ("Intercable"), the parent of Jones Cable Corporation,
manages the cable television systems owned by the Partnership. Intercable and
its subsidiaries also own and operate cable television systems as well as
manage cable television systems for other limited partnerships for which it is
general partner and, also, for affiliated entities.
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 contribution 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.
Cable Television System Acquisition
In 1988, the Partnership acquired the cable television system serving
the communities in and around Roseville, California (the "Roseville System")
and, in 1989, the Partnership acquired the cable television system serving the
communities in and around Carmel, Indiana (the "Carmel System").
The above-described acquisitions were accounted for as purchases with
the purchase price allocated to tangible and intangible assets based upon an
independent appraisal. The method of allocation of the purchase price was as
follows: first, to the fair value of the net tangible assets acquired; second
to the value of subscriber lists and any non-compete agreements; third, to
franchise costs; and fourth, to costs in excess of interests in net assets
purchased. Acquisition fees paid to affiliates of the General Partners and
other system acquisition costs were capitalized and included in the costs of
intangible assets.
(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.
22
<PAGE> 23
Property, Plant and Equipment
Depreciation is provided using the straight-line method over the
following estimated service lives:
<TABLE>
<S> <C>
Cable distribution systems 5 - 15 years
Equipment and tools 3 - 5 years
Office furniture and equipment 5 years
Buildings 10 - 20 years
Vehicles 3 years
</TABLE>
Replacements, renewals and improvements are capitalized and
maintenance and repairs are charged to expense as incurred.
Intangible Assets
Costs assigned to franchises, subscriber lists and costs in excess of
interests in net assets purchased are amortized using the straight-line method
over the following remaining estimated useful lives:
<TABLE>
<S> <C>
Franchise costs 1 - 13 years
Subscriber lists 1 - 3 years
Costs in excess of interests in net assets purchased 34 years
</TABLE>
Revenue Recognition
Subscriber prepayments are initially deferred and recognized as
revenue when earned.
(3) TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES
Acquisition Fees
Affiliates of the Managing General Partner and the Supervising General
Partner performed services for the Partnership in connection with acquisitions
of systems. For such services, The Jones Group, Ltd., an affiliate of the
Managing General Partner, and IDS Management Corporation, an affiliate of the
Supervising General Partner, received a fee of 4 percent of the original
purchase prices of the systems acquired. During 1992, aggregate fees of $9,600
were paid to such affiliates by the Partnership. No acquisition fees were paid
to such affiliates by the Partnership during 1993 or 1994.
Management Fees, Supervision Fees, Distribution Ratios and
Reimbursements
The Managing General Partner manages the Partnership and receives a
fee for its services equal to 5 percent of the gross revenues of the
Partnership, excluding revenues from the sale of cable television systems or
franchises. Management fees paid to the Managing General Partner were
$654,105, $612,588 and $558,048 during 1994, 1993 and 1992, respectively.
The Supervising General Partner participates in certain management
decisions of the Partnership and receives a fee for its services equal to 1/2
percent of the gross revenues of the Partnership, excluding revenues from the
sale of cable television systems or franchises. Supervision fees paid to the
Supervising General Partner during the years ended December 31, 1994, 1993 and
1992 were $65,410, $61,259 and $55,805, 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 partnership capital by the limited partners; the balance, 75 percent to the
limited
23
<PAGE> 24
partners, 12-1/2 percent to the Managing General Partner and 12-1/2 percent to
the Supervising General Partner. As of December 31, 1994, the Partnership had
made no such distributions.
The Partnership reimburses Intercable 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
Partnership. Allocations of personnel costs are based primarily on actual time
spent by employees of Intercable with respect to each partnership managed.
Other overhead costs are allocated primarily based on revenues and/or the cost
of partnership assets managed. Effective December 1, 1993, the allocation
method was changed to be based only on revenue, which the Managing General
Partner believes provides a more accurate method of allocation. Systems owned
by Intercable and all other systems owned by partnerships for which Intercable
is the general partner are also allocated a proportionate share of these
expenses. The Managing General Partner believes that the methodology used in
allocating overhead and administrative expense is reasonable. Reimbursements
made to Intercable by the Partnership for allocated overhead and administrative
expenses were $1,017,591, $916,891 and $838,468 for 1994, 1993 and 1992,
respectively. The Supervising General Partner may also be reimbursed for
certain expenses incurred on behalf of the Partnership. There were no
reimbursements made to the Supervising General Partner by the Partnership for
allocated overhead and administrative expenses during the years ended December
31, 1994, 1993 and 1992.
The Partnership was charged interest by Intercable during 1994 at an
average interest rate of 10 percent on amounts due to the Managing General
Partner, which approximated Intercable's weighted average cost of borrowing.
Total interest charged to the Partnership by Intercable was $19,296, $1,705 and
$4,379 in 1994, 1993 and 1992, respectively.
Payments to Affiliates for Programming Services
The Partnership receives programming from Product Information Network,
Superaudio, The Mind Extension University and Jones Computer Network, all
affiliates of the Managing General Partner. Payments to Superaudio totaled
approximately $19,257, $19,030 and $18,299 in 1994, 1993 and 1992,
respectively. Payments to The Mind Extension University totaled $17,449,
$11,074 and $10,484 in 1994, 1993 and 1992, respectively. Payments to Jones
Computer Network, which initiated service in 1994, totaled $4,568 in 1994. The
Partnership receives a commission from Product Information Network, based on a
percentage of advertising revenue and number of subscribers. Product
Information Network, which initiated service in 1994, paid commissions to the
Partnership totaling $12,236 in 1994.
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of December 31, 1994 and 1993,
consists of the following:
<TABLE>
<CAPTION>
December 31,
----------------------------------
1994 1993
------------ -------------
<S> <C> <C>
Cable distribution systems $ 29,630,038 $ 26,662,612
Equipiment and tools 1,055,820 925,499
Office furniture and equipment 513,788 480,069
Buildings 57,184 57,184
Vehicles 589,450 546,051
Land 2,000 2,000
----------- -----------
31,848,280 28,673,415
Less - accumulated depreciation (12,685,653) (10,408,482)
----------- -----------
$ 19,162,627 $ 18,264,933
=========== ===========
</TABLE>
24
<PAGE> 25
(5) DEBT
<TABLE>
<CAPTION>
Debt consists of the following: December 31,
----------------------------------
1994 1993
------------ -------------
<S> <C> <C>
Lending institutions -
Revolving credit and term loan
agreement $21,735,000 $22,080,000
Capital lease obligations 97,052 128,312
---------- ----------
$21,832,052 $22,208,312
========== ==========
</TABLE>
In February 1989, the Partnership entered into a revolving credit and
term loan agreement. At December 31, 1992, the then- outstanding balance of
$23,000,000 was converted to a term loan payable in 28 consecutive quarterly
installments which began March 31, 1993. The Managing General Partner obtained
waivers of the scheduled March 31, 1994 and June 30, 1994 principal payments to
provide liquidity for capital expenditures. The Partnership paid $345,000 in
loan repayment installments during 1994. At December 31, 1994, the outstanding
balance on the term loan was $21,735,000. The Managing General Partner
renegotiated with the Partnership's lenders to establish a revolving credit
facility with a maximum amount available of $23,000,000. The new revolving
credit facility converts to a term loan on September 30, 1995, payable in 18
consecutive quarterly installments with the final installment due December 31,
1999. Interest is at the Partnership's option of the Prime rate plus .25
percent, the London Interbank Offered Rate plus 1.25 percent or the CD rate
plus 1.5 percent. The effective interest rates on amounts outstanding as of
December 31, 1994 and 1993 were 7.19 percent and 4.75 percent, respectively.
On January 12, 1993, the Partnership entered into an interest rate cap
agreement covering outstanding debt obligations of $10,000,000. The agreement
protects the Partnership for LIBOR interest rates that exceed 7 percent for
three years from the date of the agreement. The fee of $100,000 is being
charged to interest expense over the life of the agreement.
Installments due on debt principal for each of the five years in the
period ending December 31, 1999 and thereafter, respectively, are $355,141,
$898,516, $1,333,216, $1,748,505, $17,496,674 and $-0-. At December 31, 1994,
substantially all of the Partnership's property, plant and equipment secured
the above indebtedness.
(6) 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.
Taxable losses reported to the partners is different from that
reported in the statements of operations due to the difference in depreciation
allowed under generally accepted accounting principles and the expense allowed
for tax purposes under the Modified Accelerated Cost Recovery System (MACRS).
There are no other significant differences between taxable loss and the net
loss reported in the statements of operations.
25
<PAGE> 26
(7) COMMITMENTS AND CONTINGENCIES
Office and other facilities are rented under various long-term lease
arrangements. Rent paid under such lease arrangements totalled $152,323,
$145,620 and $112,304, respectively, for the years ended December 31, 1994,
1993 and 1992. Minimum commitments under operating leases for each of the five
years in the period ended December 31, 1999 and thereafter are as follows:
<TABLE>
<S> <C>
1995 $130,818
1996 119,682
1997 23,640
1998 2,100
1999 2,100
Thereafter 4,200
--------
$282,540
=======
</TABLE>
(8) SUPPLEMENTARY PROFIT AND LOSS INFORMATION
Supplementary profit and loss information is presented below:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Maintenance and repairs $ 135,550 $ 122,667 $ 98,966
========= ========= =========
Taxes, other than income and payroll taxes $ 364,608 $ 367,514 $ 291,148
========= ========= =========
Advertising $ 95,760 $ 165,034 $ 148,015
========= ========= =========
Depreciation of property, plant and equipment $2,277,171 $2,608,916 $2,409,736
========= ========= =========
Amortization of intangible assets $3,368,093 $3,398,200 $3,571,873
========= ========= =========
</TABLE>
26
<PAGE> 27
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.
<TABLE>
<CAPTION>
Name Age Positions with the Managing General Partner
---- --- -------------------------------------------
<S> <C> <C>
Glenn R. Jones 65 Chairman of the Board and Chief Executive Officer
James B. O'Brien 45 President
Kevin P. Coyle 43 Vice President of Finance
Elizabeth M. Steele 43 Vice President and Secretary
</TABLE>
Mr. Glenn R. Jones has been Chairman of the Board of the Managing
General Partner since its formation in October 1986. Mr. Jones served as
President of the Managing General Partner until September of 1990 at which time
he was elected Chief Executive Officer. Mr. Glenn R. Jones has served as
Chairman of the Board of Directors and Chief Executive Officer of Jones
Intercable, Inc. since its formation in 1970, and he was President from June
1984 until April 1988. Mr. Jones is the sole shareholder, President and
Chairman of the Board of Directors of Jones International, Ltd. He is also
Chairman of the Board of Directors of the subsidiaries of Jones Intercable, Inc.
and of certain other affiliates of Jones Intercable, Inc. Mr. Jones has been
involved in the cable television business in various capacities since 1961, is
a past and present member of the Board of Directors of the National Cable
Television Association, and is a former member of its Executive Committee. Mr.
Jones is a past director and member of the Executive Committee of C-Span. Mr.
Jones has been the recipient of several awards including the Grand Tam Award in
1989, the highest award from the Cable Television Administration and Marketing
Society; the Chairman's Award from the Investment Partnership Association,
which is an association of sponsors of public syndications; the cable
television industry's Public Affairs Association President's Award in 1990, the
Donald G. McGannon award for the advancement of minorities and women in cable;
the STAR Award from American Women in Radio and Television, Inc. for exhibition
of a commitment to the issues and concerns of women in television and radio;
and the Women in Cable Accolade in 1990 in recognition of support of this
organization. Mr. Jones is also a founding member of the James Madison Council
of the Library of Congress and is on the Board of Governors of the American
Society of Training and Development.
Mr. James B. O'Brien was elected President of the Managing General
Partner in September of 1990. Mr. O'Brien joined Jones Intercable, Inc. in
January 1982. Mr. O'Brien was elected President and a Director of Jones
Intercable, Inc. in December 1989. Prior to being elected President and a
Director of Jones Intercable, Inc., Mr. O'Brien served as a Division Manager,
Director of Operations Planning/Assistant to the CEO, Fund Vice President and
Group Vice President/Operations. Mr. O'Brien is a board member of Cable Labs,
Inc., the research arm of the cable television industry. He also serves as a
director of the Cable Television Administration and Marketing Association and
as a director of the Walter Kaitz Foundation, a foundation that places people
of any ethnic minority group in positions with cable television systems,
networks and vendor companies.
Mr. Kevin P. Coyle was elected Vice President of Finance of the
Managing General Partner in February 1989. Mr. Coyle is the principal
financial and accounting officer of the Managing General Partner. Mr. Coyle
joined The Jones Group, Ltd. in July 1981 as Vice President/Financial Services.
He was elected Treasurer of Jones Intercable, Inc. in August 1987, Vice
President/Treasurer in April 1988 and Group Vice President/Finance in October
1990.
27
<PAGE> 28
Ms. Elizabeth M. Steele has served as Secretary of the Managing
General Partner since August 1987 and Vice President since February 1989. Ms.
Steele joined Jones Intercable, Inc. in August 1987 as Vice President/General
Counsel and Secretary. From August 1980 until joining Jones Intercable, Inc.,
Ms. Steele was an associate and then a partner at the Denver law firm of
Davis, Graham & Stubbs, which serves as counsel to Jones Intercable, Inc.
Certain information concerning directors and executive officers of the
Supervising General Partner is set forth below:
<TABLE>
<CAPTION>
Name Age Positions with the Supervising General Partner
---- --- ----------------------------------------------
<S> <C> <C>
Janis E. Miller 43 President and Director
Morris Goodwin, Jr. 43 Vice President and Treasurer
Lori J. Larson 36 Vice President and Director
Ronald W. Powell 50 Vice President
Juanita M. Costa 46 Vice President and Director
Bradley C. Nelson 30 Vice President
Louis C. Fornetti 45 Director
</TABLE>
Ms. Janis E. Miller has served as Vice President of Variable Assets of
American Express Financial Corporation since December 1993. From June 1990 to
November 1993, Ms. Miller held the position of Vice President of Mutual
Funds/Limited Partnership Product Development and Marketing with American
Express Financial Corporation.
Mr. Morris Goodwin, Jr. has served as Vice President and Treasurer of
American Express Financial Corporation since July 1989. From January 1988 to
July 1989, he had been the Chief Financial Officer and Treasurer of IDS Bank &
Trust Company. From January 1980 to January 1988, he was a Vice President with
Morgan Stanley, an investment banking business headquartered in New York.
Ms. Lori J. Larson has been employed by American Express Financial
Corporation since 1981 and currently holds the title of Vice President. Since
August 1988, she has been responsible for day-to-day management of vendor
relationships, due diligence review, and operational aspects for various
limited partnerships distributed by American Express Financial Advisors Inc.
In addition, Ms. Larson is responsible for product development of the publicly
offered mutual funds in the IDS Mutual Fund Group.
Mr. Ronald W. Powell 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 IDS law department since 1975.
Ms. Juanita M. Costa has served as Director of Financial Education
Services ("FES") for American Express Financial Corporation since January 1994.
She is responsible for marketing FES programs to corporate clients. Ms. Costa
has served as Vice President of Investment Services with IDS Trust Company
since October 1991. From April 1987 to mid-1991, Ms. Costa was Vice
President-Limited Partnership Operations. From June 1984 to April 1987, she
was a Vice President of L.F. Rothschild and, from January 1980 to June 1984,
she was an Assistant Vice President at Prudential Bache Securities.
Mr. Bradley C. Nelson joined American Express Financial Corporation in
1991 as an Investment Department analyst following his graduation from Cornell
University's Johnson Graduate School of Management where he earned an MBA with
a concentration in finance.
28
<PAGE> 29
Mr. Louis C. Fornetti has been employed with American Express
Financial Corporation since 1985 as Corporate Controller. He has been on the
board of directors of American Express Financial Corporation since 1988 and
assumed the role of Chief Financial Officer and Senior Vice President in 1993.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no employees; however, various personnel are
required to operate cable television systems owned by the Partnership. Such
personnel are employed by Intercable and, pursuant to the terms of the
Partnership's limited partnership agreement, the cost of such employment is
charged by the Managing General Partner to the Partnership as a direct
reimbursement item. See Item 13.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
No person or entity owns more than 5 percent of the limited
partnership interests of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Managing General Partner and its affiliates engage in certain
transactions with the Partnership as contemplated by the limited partnership
agreement of the Partnership. The Managing General Partner believes that the
terms of such transactions are generally as favorable as could be obtained by
the Partnership from unaffiliated parties. This determination has been made by
the Managing General Partner in good faith, but none of the terms were or will
be negotiated at arm's-length and there can be no assurance that the terms of
such transactions have been or will be as favorable as those that could have
been obtained by the Partnership from unaffiliated parties.
The Supervising General Partner and its affiliates engage in certain
transactions with the Partnership as contemplated by the limited partnership
agreement of the Partnership. The Supervising General Partner believes that
the terms of such transactions, which are set forth in the Partnership's
limited partnership agreement, are generally as favorable as could be obtained
by the Partnership from unaffiliated parties. This determination has been made
by the Supervising General Partner in good faith, but none of the terms were or
will be negotiated at arm's-length and there can be no assurance that the terms
of such transactions have been or will be as favorable as those that could have
been obtained by the Partnership from unaffiliated parties.
The Managing General Partner charges the Partnership a management fee,
and the Partnership reimburses Intercable, the parent of the Managing General
Partner, for certain allocated overhead and administrative expenses in
accordance with the terms of the limited partnership agreement of the
Partnership. These expenses consist primarily of salaries and benefits paid to
corporate personnel, rent, data processing services and other facilities costs.
Such personnel provide engineering, marketing, administrative, accounting,
legal and investor relations services to the Partnerships. Allocations of
personnel costs are based primarily on actual time spent by employees with
respect to each partnership managed. Remaining overhead costs are allocated
based on revenues and/or the costs of assets managed for the Partnerships.
Systems owned by Intercable and all other systems owned by partnerships for
which Intercable serves as general partner, are also allocated a proportionate
share of these expenses. The Supervising General Partner, IDS Cable
Corporation, charges the Partnership for supervision fees in accordance with
the limited partnership agreement of the Partnership.
Intercable, the parent of the Managing General Partner, also advances
funds and charges interest on the balance payable from the Partnership. The
interest rate charged the Partnership approximates Intercable's weighted
average cost of borrowing.
29
<PAGE> 30
The Systems receive stereo audio programming from Superaudio, a joint
venture owned 50% by an affiliate of the Managing General Partner and 50% by an
unaffiliated party, educational video programming from Mind Extension
University, Inc., an affiliate of the Managing General Partner, and computer
video programming from Jones Computer Network, Ltd., an affiliate of the
Managing General Partner, for fees based upon the number of subscribers
receiving the programming.
Product Information Network ("PIN"), an affiliate of the Managing
General Partner, provides advertising time for third parties on the Systems.
In consideration, the revenues generated from the third parties are shared
two-thirds and one-third between PIN and the Partnership. During the year
ended December 31, 1994, the Partnership received revenues from PIN of $12,236.
The charges to the Partnership for related party transactions are as
follows for the periods indicated:
<TABLE>
<CAPTION>
At December 31,
-------------------------------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Management fees $654,105 $612,588 $558,048
Supervision fees 65,410 61,259 55,805
Allocation of expenses 1,017,591 916,891 838,468
Acquisition fees -0- -0- 9,600
Interest expense 29,296 1,705 4,379
Amount of notes and advances outstanding 665,782 -0- 238,198
Highest amount of notes and advances outstanding 665,782 238,198 238,198
Programming fees:
Superaudio 19,257 19,030 18,299
Mind Extension University 17,449 11,074 10,484
Jones Computer Network 4,568 -0- -0-
</TABLE>
30
<PAGE> 31
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 87-A,
Ltd. (1)
10.1.1 Copy of franchise and related documents granting a cable
television system franchise for the County of Placer, California
(IDS/Jones 87-A). (1)
10.1.2 Copy of franchise and related documents granting a cable
television system franchise for the City of Roseville,
California (IDS/Jones 87-A). (1)
10.1.3 Copy of franchise and related documents granting a cable
television system franchise for the County of Placer, California
(IDS/Jones 87-A). (1)
10.1.4 Copy of franchise and related documents granting a cable
television system franchise for Boone County, Indiana (IDS/Jones
87-A). (1)
10.1.5 Copy of franchise and related documents granting a cable
television system franchise for the City of Carmel, Indiana
(IDS/Jones 87-A). (1)
10.1.6 Copy of franchise and related documents granting a cable
television system franchise for the Town of Fortville,
Indiana (IDS/Jones 87-A). (1)
10.1.7 Copy of franchise and related documents granting a cable
television system franchise for the Town of Zionsville, Indiana
(IDS/Jones 87-A). (1)
10.1.8 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Carmel),
Indiana (IDS/Jones 87-A). (1)
10.1.9 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Fortville),
Indiana (IDS/Jones 87-A). (1)
10.1.10 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Zionsville),
Indiana (IDS/Jones 87-A). (1)
10.1.11 Copy of franchise and related documents granting a cable
television system franchise for Hancock County, Indiana
(IDS/Jones 87-A). (1)
10.1.12 Copy of franchise and related documents granting a cable
television system franchise for the Town of Ingalls, Indiana
(IDS/Jones 87-A). (1)
10.1.13 Copy of franchise and related documents granting a cable
television system franchise for Madison County, Indiana
(IDS/Jones 87-A). (1)
10.2.1 Revolving Credit and Term Loan Agreement dated February 6, 1989
between IDS/Jones Growth Partners 87-A, Ltd. and Provident
National Bank. (1)
31
<PAGE> 32
10.2.2 Amendment No. 1 dated May 29, 1992 to Revolving Credit and Term
Loan Agreement dated February 6, 1989 between IDS/Jones Growth
Partners 87-A, Ltd. and Provident National Bank. (5)
10.2.3 Amendment No. 2 dated March 31, 1994 to Revolving Credit and
Term Loan Agreement dated February 6, 1989 between IDS/Jones
Growth Partners 87-A, Ltd. and Provident National Bank.
27 Financial Data Schedule
__________
(1) Incorporated by reference from the Form 10-K of IDS/Jones Growth
Partners (Commission File Nos. 0-16183 and 0-17734) for fiscal
year ended December 31, 1988.
(2) Incorporated by reference from the Annual Report on Form 10-K of
IDS/Jones Growth Partners II (Commission File No. 0-18133) for
fiscal year ended December 31, 1992.
(b) Reports on Form 8-K
None.
32
<PAGE> 33
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.
IDS/JONES GROWTH PARTNERS 87-A, LTD.
a Colorado limited partnerships
By Jones Cable Corporation,
their Managing General Partner
By: /s/ Glenn R. Jones
---------------------------------
Glenn R. Jones
Chairman of the Board and
Dated: March 27, 1995 Chief Executive Officer
By IDS Cable Corporation,
their Supervising General Partner
By: /s/ Janis E. Miller
--------------------------------
Janis E. Miller
Dated: March 27, 1995 President and Director
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.
OFFICERS AND DIRECTORS OF JONES CABLE CORPORATION:
By: /s/ Glenn R. Jones
-------------------------------
Glenn R. Jones
Chairman of the Board and
Chief Executive Officer
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Kevin P. Coyle
-------------------------------
Kevin P. Coyle
Vice President/Finance
(Principal Financial and
Dated: March 27, 1995 Accounting Officer)
33
<PAGE> 34
OFFICERS AND DIRECTORS OF IDS CABLE CORPORATION:
By: /s/ Janis E. Miller
--------------------------------
Janis E. Miller
President and Director
Dated: March 27, 1995 (Principal Executive Officer)
By: /s/ Morris Goodwin, Jr.
--------------------------------
Morris Goodwin, Jr.
Vice President and Treasurer
(Principal Financial and
Dated: March 27, 1995 Accounting Officer)
By: /s/ Lori J. Larson
--------------------------------
Lori J. Larson
Dated: March 27, 1995 Vice President and Director
By: /s/ Juanita M. Costa
--------------------------------
Juanita M. Costa
Dated: March 27, 1995 Vice President and Director
By: /s/ Louis C. Fornetti
--------------------------------
Dated: March 27, 1995 Louis C. Fornetti, Director
34
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
- - - ------- ----
<S> <C> <C>
4.1 Limited Partnership Agreement for IDS/Jones Growth Partners 87-A,
Ltd. (1)
10.1.1 Copy of franchise and related documents granting a cable
television system franchise for the County of Placer, California
(IDS/Jones 87-A). (1)
10.1.2 Copy of franchise and related documents granting a cable
television system franchise for the City of Roseville,
California (IDS/Jones 87-A). (1)
10.1.3 Copy of franchise and related documents granting a cable
television system franchise for the County of Placer, California
(IDS/Jones 87-A). (1)
10.1.4 Copy of franchise and related documents granting a cable
television system franchise for Boone County, Indiana (IDS/Jones
87-A). (1)
10.1.5 Copy of franchise and related documents granting a cable
television system franchise for the City of Carmel, Indiana
(IDS/Jones 87-A). (1)
10.1.6 Copy of franchise and related documents granting a cable
television system franchise for the Town of Fortville,
Indiana (IDS/Jones 87-A). (1)
10.1.7 Copy of franchise and related documents granting a cable
television system franchise for the Town of Zionsville, Indiana
(IDS/Jones 87-A). (1)
10.1.8 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Carmel),
Indiana (IDS/Jones 87-A). (1)
10.1.9 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Fortville),
Indiana (IDS/Jones 87-A). (1)
10.1.10 Copy of franchise and related documents granting a cable
television system franchise for Hamilton County (Zionsville),
Indiana (IDS/Jones 87-A). (1)
10.1.11 Copy of franchise and related documents granting a cable
television system franchise for Hancock County, Indiana
(IDS/Jones 87-A). (1)
10.1.12 Copy of franchise and related documents granting a cable
television system franchise for the Town of Ingalls, Indiana
(IDS/Jones 87-A). (1)
10.1.13 Copy of franchise and related documents granting a cable
television system franchise for Madison County, Indiana
(IDS/Jones 87-A). (1)
10.2.1 Revolving Credit and Term Loan Agreement dated February 6, 1989
between IDS/Jones Growth Partners 87-A, Ltd. and Provident
National Bank. (1)
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
Exhibit Page
- - - ------- ----
<S> <C> <C>
10.2.2 Amendment No. 1 dated May 29, 1992 to Revolving Credit and Term
Loan Agreement dated February 6, 1989 between IDS/Jones Growth
Partners 87-A, Ltd. and Provident National Bank. (5)
10.2.3 Amendment No. 2 dated March 31, 1994 to Revolving Credit and
Term Loan Agreement dated February 6, 1989 between IDS/Jones
Growth Partners 87-A, Ltd. and Provident National Bank.
27 Financial Data Schedule
</TABLE>
__________
(1) Incorporated by reference from the Form 10-K of IDS/Jones Growth
Partners (Commission File Nos. 0-16183 and 0-17734) for fiscal
year ended December 31, 1988.
(2) Incorporated by reference from the Annual Report on Form 10-K of
IDS/Jones Growth Partners II (Commission File No. 0-18133) for
fiscal year ended December 31, 1992.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 407,610
<SECURITIES> 0
<RECEIVABLES> 498,516
<ALLOWANCES> (17,015)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 31,848,280
<DEPRECIATION> (12,685,653)
<TOTAL-ASSETS> 36,683,823
<CURRENT-LIABILITIES> 1,598,481
<BONDS> 21,832,052
<COMMON> 0
0
0
<OTHER-SE> 13,253,290
<TOTAL-LIABILITY-AND-EQUITY> 36,683,823
<SALES> 0
<TOTAL-REVENUES> 13,082,094
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<EPS-PRIMARY> (18.00)
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</TABLE>
