<PAGE>

                                     FORM 10-K
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                                         OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 
For the year ended December 31, 1998
Commission file number: 333-62077

                         JONES INTERNATIONAL NETWORKS, LTD.
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)

     Colorado                                          84-1470911
     --------                                          ----------
(State of Organization)                                (IRS Employer
                                                       Identification No.)

P.O. Box 3309, Englewood, Colorado 80155-3309          (303) 792-3111
---------------------------------------------          -----------------------
(Address of principal executive office and Zip Code)   (Registrant's telephone
                                                       no. including area code)


       Securities registered pursuant to Section 12(g) of the Act:  None*
       ----------------------------------------------------------

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
        -----                                                      -----

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. __________ 

*This Annual Report on Form 10-K is being filed pursuant to Section 15(d) of 
the Securities Exchange Act of 1934, as amended. 

(40771)

<PAGE>

                         JONES INTERNATIONAL NETWORKS, LTD.

                             ANNUAL REPORT ON FORM 10-K
                        FOR THE YEAR ENDED DECEMBER 31, 1998


                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                       Page No.
                                                                       --------
<S>                                                                    <C>
                                PART I                                      
 ITEM 1.   BUSINESS                                                        1
      The Company                                                          1
              Radio Programming                                            2
                 Radio Advertising Representation Services                 3
                 Television Programming--Great American Country            3
                 Television Programming--Product Information Network       3
                 Satellite Delivery and Production Support Services        4
      Company Background                                                   4
      Employees                                                            5
      Issuance of Debt in 1998                                             5
      Radio Programming                                                    6
                The Radio Programming Market                               6
                24-Hour Programming                                        7
                Long-Form Programming                                      7
                Short-Form Programming                                     7
                Services                                                   7
        The Radio Network--Jones Radio                                     7
        Radio Advertising Representation Services                         10
                The Radio Advertising Market                              10
                MediaAmerica                                              11
        Other Audio Services                                              12
        Television Programming--Great American Country                    12
                The Cable Television Market                               12
                 The Country Music Industry                               12
                 Great American Country                                   13
        Television Programming--The Product Information Network           14
                  Long-Form Advertising Market                            14
                  The Product Information Network                         15
         Satellite Delivery and Production Support Services               16
         Competition                                                      17
                  Radio Network                                           17
                  Radio Advertising Representation Services               18
                  Television Networks                                     18

</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                    <C>

                  Satellite Delivery and Production Support Services      19
                  Other Competitive Factors                               19
         Government Regulation                                            20
          Risk Factors                                                    20
                                                                            
 ITEM 2.   PROPERTIES                                                     21
                                                                            
 ITEM 3.   LEGAL PROCEEDINGS                                              21

 ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY                    21
           HOLDERS

                                PART II                                     

 ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND                      22
           RELATED STOCKHOLDER MATTERS

 ITEM 6.   SELECTED FINANCIAL DATA                                        23

 ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT                 32
           MARKET RISK

 ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY                         33
           DATA

 ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH                              69
           ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
           DISCLOSURE

                               PART III

 ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE                        69
           REGISTRANT

 ITEM 11.  EXECUTIVE COMPENSATION                                         73

 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL                       77
           OWNERS, DIRECTORS AND MANAGEMENT

 ITEM 13.  CERTAIN TRANSACTIONS                                           78

                                PART IV

 ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K                               83

</TABLE>

                                       ii

<PAGE>

Certain information contained in this Form 10-K Report contains 
"forward-looking statements" within the meaning of the Private Securities 
Litigation Reform Act of 1995.  All statements, other than statements of 
historical facts, included in this Form 10-K Report that address activities, 
events or developments that Jones International Networks, Ltd. (the 
"Company") expects, believes or anticipates will or may occur in the future, 
including such matters as changes in the industries in which the Company 
operates, the Company's acquisition and marketing strategies, capital 
expenditures, the Company's operating strategies, the effects of competition, 
the Company's expansion plans and other such matters, are forward-looking 
statements.  These forward-looking statements are based upon certain 
assumptions and are subject to a number of risks and uncertainties.  Actual 
events or results may differ materially from those discussed in the 
forward-looking statements as a result of various factors.

                                    PART I

                               ITEM 1.  BUSINESS

THE COMPANY 
                                          
     Jones International Networks, Ltd. (the "Company") is a Colorado 
corporation organized in 1998 as the successor to a number of businesses 
which have been in operation for a number of years.  The Company provides 
radio programming to radio stations in the U.S. and cable television 
programming to cable system operators. The Company's radio programming 
includes twelve 24-hour formats and 18 syndicated programs that are broadcast 
by approximately 2,300 radio station affiliates throughout the United States 
to over 33 million weekly listeners. The Company's cable television 
programming consists of Great American Country (country music videos) and the 
Product Information Network (long-form advertising). Pursuant to affiliate 
agreements with five of the ten largest multiple-system operators ("MSOs"), 
as well as the two cable programming cooperatives and others, Great American 
Country was distributed to 7.2 million subscribers at December 31, 1998. The 
Product Information Network is presently distributed to 304 cable systems and 
broadcast affiliates and is available to 20.6 million households. The Company 
has successfully expanded the reach of its cable television programming to a 
broad number of major MSOs as a result of the extensive experience of the 
Company's senior management team, including Mr. Glenn R. Jones, the Company's 
Chairman and majority shareholder. 

     In July 1998, the Company acquired (the "Acquisition") substantially all 
the assets of MediaAmerica, Inc. ("MediaAmerica"). MediaAmerica was founded 
in 1987 to provide advertising representation services to providers of radio 
programming, such as the Company, and in 1994 expanded to provide radio 
programming and other services to radio stations. The Acquisition provides 
the Company with a group of experienced executives who have long-standing 
relationships with many advertising agencies and advertisers that the Company 
believes will be valuable in driving its advertising-related revenue growth.

                                       1
<PAGE>

     The Company primarily derives its revenues from the sale of the radio 
station or cable television system airtime inventory to national advertisers 
that are attracted to the Company's ability to efficiently reach a large 
national audience across a variety of demographics and markets. The Company 
also receives license fees from MSOs that carry Great American Country and 
provides satellite delivery and production support services for its own 
programming operations as well as to others.

     The Company provides a wide variety of advertisers many different ways 
to reach their target audiences through network radio and cable television. 
Given network radio's wide reach and relatively low advertising costs, it is 
one of the most cost-effective means to reach targeted demographic groups. 
The Company's radio audience demographics are primarily adults, ages 25-54. 
Great American Country, the Company's country music television network, also 
targets this demographic sector. According to industry sources, country music 
is one of America's most popular music formats.  In addition, the Company 
believes the Product Information Network's long-form advertising provides 
television advertisers with a cost-effective medium to deliver sales 
messages, product introductions and demonstrations to targeted audiences. The 
Company believes that the number of advertisers and the volume of long-form 
advertising will continue to grow as the Product Information Network's 
coverage of U.S. households increases and other advertisers, who have not 
historically utilized long-form advertising, take advantage of the benefits 
of long-form advertising to reach their desired audience. 

     RADIO PROGRAMMING.   The Company, through its radio programming 
division, Jones Radio Network, Inc. ("Jones Radio"), typically provides 
programming to its radio affiliates in exchange for commercial airtime 
inventory which it sells to national advertisers. Jones Radio's programming 
and related services offer radio stations a cost-efficient alternative to the 
talent, time and expense required to develop in-house programming. In 
addition, Jones Radio's variety of appealing 24-hour formats, primarily 
country and adult contemporary, and its nationally recognized group of 
syndicated programs and personalities, enable radio stations to distinguish 
themselves within their increasingly competitive markets. As a group, Jones 
Radio's radio station affiliates generally capture larger audience (measured 
by average quarter hour listeners ("AQH")) as a result of broadcasting Jones 
Radio's programming, which can result in additional local advertising 
revenues for these radio stations. Jones Radio has been a successful provider 
of country music programming, one of the most popular music formats with over 
4 million U.S. listeners each week. Jones Radio provides its programming to 
approximately 30% of all country radio stations in the United States and 
believes it is the largest provider of country music programming to U.S. 
radio stations. As a result of the Acquisition, Jones Radio has substantially 
increased its AQH to 6.5 million, which represents 33 million total weekly 
listeners. While Jones Radio has historically provided programming to radio 
stations in small and medium-sized markets, it is currently focusing its 
programming development efforts on programming 

                                       2

<PAGE>

that will appeal to larger markets. Jones Radio has radio station affiliates 
in all 50 states and in all of the top 50 markets. 

     RADIO ADVERTISING REPRESENTATION SERVICES.   As a result of the 
Acquisition, the Company offers advertising representation services to 
providers of radio programming throughout the United States. As a 
representation firm, MediaAmerica historically acted as an intermediary 
between advertisers and radio programming providers, such as the Company. The 
Company was one of MediaAmerica's largest customers in 1997 for this type of 
service. The Company plans to develop numerous cross-selling opportunities 
and other synergies that arise from the complementary nature of 
MediaAmerica's services and customer base. There can be no assurance that the 
Company will be successful in these efforts. 

     TELEVISION PROGRAMMING--GREAT AMERICAN COUNTRY.   Great American 
Country, Inc. is a 24-hour country music video network that capitalizes on 
the popularity of country music and leverages the Company's core competency 
in country music programming. Great American Country represents a 
high-quality alternative to currently available country music networks and 
offers MSOs attractive incentives for carriage. In order to drive subscriber 
growth, Great American Country generally offers affiliates a one-time cash 
launch incentive and waives license fees for a certain period which varies 
based on the level of subscriber commitment. In 1998, the Company entered 
into agreements with two significant MSOs to issue them shares of the 
Company's Class A Common Stock in return for which Great American Country 
will be paid license fees from the date of launch (the "GAC Equity 
Agreements"). Great American Country has affiliate agreements with five of 
the ten largest MSOs, including Adelphia Communications Corporation 
("Adelphia"), Comcast Cable Communications, Inc. ("Comcast"), Jones 
Intercable, Inc. ("Jones Intercable"), TCI Communications, Inc. ("TCI") and 
Time Warner Networks, Inc. ("Time Warner"), as well as the two cable 
programming cooperatives, Telesynergy, Inc. and National Cable Television 
Cooperative, Inc.

     TELEVISION PROGRAMMING--PRODUCT INFORMATION NETWORK.   The Company 
introduced the Product Information Network in October 1993 to capitalize on 
the growing infomercial industry which, based on industry statistics, 
represents approximately $1 billion of airtime expenditures. The Product 
Information Network is aired on a full-time (24-hour) basis or on a part-time 
basis, thereby affording cable and broadcast affiliates the opportunity to 
generate incremental revenues from otherwise under-utilized time. The Product 
Information Network airs long-form informational programming from all of the 
major infomercial producers.  Through agencies, it also airs advertising from 
major corporate advertisers. Since December 31, 1994, the Product Information 
Network has increased its base of cable subscribers and broadcast households 
from 1.5 million to 20.6 million at December 31, 1998. At December 31, 1998, 
the Product Information Network was distributed to 8.6 million full-time 
revenue equivalent subscribers through 304 cable systems and broadcast 
affiliates. The MSOs that carry the network on a portion of their cable 
systems include the ten largest MSOs:  

                                       3

<PAGE>

including Adelphia, Cablevision Systems Corporation ("Cablevision"), Comcast, 
Cox Communications, Inc. ("Cox"), Jones Intercable, Marcus Cable Company, LP 
("Marcus Cable"), MediaOne Group, TCI, Century Communications and Time 
Warner. The Product Information Network operates through a joint venture 
between the Company and Cox (the "PIN Venture"). 

     SATELLITE DELIVERY AND PRODUCTION SUPPORT SERVICES.   The Company 
supports the production and distribution of its radio and cable television 
programming operations through its state-of-the-art satellite uplinking 
facilities. The Company's satellite delivery and production support services 
provide reliable and efficient playback, trafficking, uplinking and satellite 
transmission services to the Company's radio and cable television programming 
operations and to other companies. The Company believes that the integration 
of these distribution services gives it strict management and quality control 
over the distribution of its programming. The Company has financed its 
ownership of two analog satellite transponders through a capital lease that 
was fully prepaid with a portion of the proceeds of the offering of its 
11 3/4% Senior Secured Notes due 2005. The channel capacity on one satellite 
transponder has been digitally compressed to seven channels, four of which 
are currently leased to Product Information Network, Great American Country 
and two related parties. This transponder could now be digitally compressed 
into additional channels if demand warranted. In August 1998, the Company 
entered into a lease agreement with an unaffiliated party for the lease of 
three digital channels until August 31, 1999.   The Company is currently in 
the process of soliciting prospective lessees for these three digital 
channels once the current lease agreement expires on August 31, 1999.  The 
Company continues to market both its upcoming and existing additional 
compressible capacity on its Satcom C-3 transponder and related services.  
The other satellite transponder is an analog channel which the Company leased 
on a long-term basis to a third party in mid-1998. 

COMPANY BACKGROUND 
                                          
     The Company was founded by Glenn R. Jones. Mr. Jones is the Chairman and 
Chief Executive Officer of Jones Intercable, one of the ten largest MSOs 
serving more than 1.4 million subscribers through 37 cable television systems 
in the United States. Mr. Jones has been instrumental in leading the 
Company's early growth and continues as its majority shareholder and 
Chairman. Mr. Jones beneficially owns 100% of the Company's Class B Common 
Stock, which has the right as a class to elect 75% of the Company's Board of 
Directors, and 78.7% of the Company's Class A Common Stock, and he controls 
the election of the six members of the Company's Board of Directors (subject 
to certain contractual agreements made in connection with the Acquisition). 
Mr. Jones has been a leader in the cable television business for over 35 
years and in 1994 he was inducted into the Broadcasting and Cable Hall of 
Fame. Jones Intercable is a significant customer of the Company, as it 
distributes Great American Country and the Product Information Network to 
most of its subscribers. This relationship is expected to continue in 
accordance with current contractual arrangements after the 

                                       4

<PAGE>

closing, in early 1999, of the acquisition by Comcast Corporation of certain 
shares representing a controlling interest in Jones Intercable from Mr. Jones 
and other major shareholders of Jones Intercable. Knowledge TV, Inc., an 
affiliate of the Company, also leases satellite transponder capacity and 
purchases uplinking and other services from the Company. 

     Upon the sale of Mr. Jones' interest in Jones Intercable, Jones 
Intercable will no longer share in many of the administrative and related 
expenses which have historically been shared by the various entities 
affiliated with Mr. Jones, including the Company. See "Management's 
Discussion and Analysis of Financial Condition and Results of Operations." 

     The Company was incorporated as a Colorado corporation and is the 
successor to certain affiliated entities that previously conducted certain of 
its businesses. The Company's corporate offices are located at 9697 East 
Mineral Avenue, Englewood, Colorado 80112, and its telephone number is 
(303) 792-3111. 

EMPLOYEES 

     The Company refers to its employees as associates. As of December 31, 
1998, the Company had 177 full-time and 78 part-time associates, including 
MediaAmerica personnel. In addition, the Company maintains relationships with 
independent writers, program hosts, technical personnel and producers. None 
of the associates are covered by a collective bargaining agreement, and the 
Company believes its employee relations to be good. 

ISSUANCE OF DEBT IN 1998

     In July 1998, the Company sold $100,000,000 of its 11 3/4% Senior 
Secured Notes due July 1, 2005 (the "Senior Notes").  The Senior Notes are 
secured by the capital stock of the Company's subsidiary, JPN, Inc., and its 
direct subsidiaries.  The Senior Notes are fully and unconditionally 
guaranteed, jointly and severally, on a senior unsecured basis by the 
following wholly-owned subsidiaries of the Company:  JPN, Inc., Jones Space 
Holdings, Inc., Jones Earth Segment, Inc., Jones Infomercial Networks, Inc., 
Jones Radio Holdings, Inc., Great American Country, Inc., Jones Galactic 
Radio, Inc., Jones Infomercial Network Ventures, Inc., Jones Galactic Radio 
Partners, Inc., Jones Radio Network, Inc., Jones Audio Services, Inc., Jones 
Radio Network Ventures, Inc., MediaAmerica, Inc., Jones MAI Radio, Inc. and 
Jones/Owens Radio Programming LLC, (collectively, the "Subsidiary 
Guarantors").  The only existing subsidiaries of the Company that did not 
guarantee the Senior Notes are the following three entities:  The PIN 
Venture, a general partnership in which the Company, through a Subsidiary 
Guarantor, owns a 54% interest; Galactic Tempo, d/b/a Superaudio 
("Superaudio"), a general partnership in which the Company, through a 
Subsidiary Guarantor, owns a 50% interest and Jones/Capstar Radio Programming 
LLC, a limited liability company in which the Company, through a Subsidiary 

                                       5

<PAGE>

Guarantor, owns a 50% interest.  Proceeds from the sale of the Senior Notes 
were used as follows:  (i) $28.2 million to prepay the capital lease 
obligations relating to the satellite transponders, (ii) $26.7 million to 
finance the cash portion of the Acquisition, (iii) $16.7 million to repay 
indebtedness under Radio Holding's $30 million revolving credit facility and 
(iv) the remaining $23.9 million for general corporate purposes, of which $10 
million was deposited into a separate account and was partially used by the 
Company for the payment of interest on the Senior Notes.  

     In December 1998, the Company, pursuant to an effective Registration 
Statement on Form S-4, completed the exchange of its $100,000,000 aggregate 
principal amount of 11 3/4% Senior Secured Notes due 2005 (the "Exchange 
Notes") for all of the Senior Notes.  The Exchange Notes evidence the same 
debt as the Senior Notes which they replace and are entitled to the benefits 
of the Indenture dated as of July 10, 1998 governing the Senior Notes and the 
Exchange Notes.  The Exchange Notes do not have certain transfer restriction 
features which applied to the Senior Notes.  There were no proceeds to the 
Company from the issuance of the Exchange Notes pursuant to said exchange 
offering.

RADIO PROGRAMMING 

     THE RADIO PROGRAMMING MARKET 

     According to the FCC, there are approximately 10,500 commercial radio 
stations in the United States. Radio broadcasting has consistently maintained 
a steady share of total advertising revenues in the United States, in part 
because it is among the most cost effective forms of advertising. Radio 
allows the advertiser to target specific demographic groups in particular 
geographic areas at a relatively low cost, making it available to small, 
local advertisers as well as large, regional and national advertisers.

     Radio stations compete for advertising revenues in their respective 
markets. To be competitive, radio stations are continuously seeking the 
highest quality programming at the lowest cost. Radio stations develop 
formats such as music, news/talk or various types of entertainment 
programming, intended to appeal to a target listening audience with 
demographic characteristics that will attract national, regional and local 
commercial advertisers. However, limited financial and creative resources, 
among other things, prevent most radio stations from producing quality 
programming. Accordingly, radio stations rely on network programming from 
independent producers, or "syndicators," such as the Company, to enhance or 
provide their radio programming. Radio programming broadcast on an exclusive 
geographic basis can help differentiate a station within its market, and 
thereby enable a station to increase its audience and local advertising 
revenues. By placing a program with radio stations throughout the United 
States, the syndicator creates a "network" of stations that carry its 
programming. A radio network typically provides programming to radio stations 
in exchange for a contractual amount of commercial broadcast time, usually 
expressed as a number of minutes per hour or per day, which is then resold to 
advertisers. The 

                                       6

<PAGE>

Company believes that most commercial radio stations utilize radio network or 
syndicated third party programming. The commercial broadcast time for such 
programs may vary from market to market within a specified time period, 
depending upon the requirements of the particular radio station affiliate and 
the terms of the contract with the affiliate. 

     The Telecommunications Act of 1996 (the "Telecom Act") significantly 
changed the radio broadcast industry by repealing national limits on the 
number of radio stations that may be owned by one entity and by relaxing the 
common ownership rules in a single market. As a result, the Telecom Act has 
created a wave of radio station acquisitions and increased consolidation in 
the industry. This, in turn, has led many ownership groups to seek ways to 
cut costs, better manage their operations and improve their efficiencies. 
Radio networks, such as the Company's, may address these needs by providing 
high quality programming to radio stations and reducing the radio stations' 
costs. 

     There are four basic types of programs from which a station may select: 
24-hour programming, long-form programming, short-form programming and 
services. 

     24-HOUR PROGRAMMING.   This "round-the-clock" programming is aired live 
and hosted by announcers. Examples of this type of programming include 
popular music formats such as country, adult contemporary and oldies. 

     LONG-FORM PROGRAMMING.   This type of programming is less than 24 hours 
in duration and is designed to fill, on a daily or weekly daypart basis, a 
one-to six-hour time period of the day, such as mornings-6 a.m. to 10 a.m., 
middays-10 a.m. to 3 p.m., afternoons-3 p.m. to 7 p.m., evenings-7 p.m. to 
midnight, or overnights-midnight to 6 a.m. Examples of this type of 
programming include talk shows hosted by nationally known personalities and 
popular countdown shows hosted by nationally known on-air personalities. 

     SHORT-FORM PROGRAMMING.   This type of programming generally is less 
than 5 minutes in duration. Examples of this type of programming include news 
and commentary radio shows. 

     SERVICES.   In addition, radio networks provide radio stations services 
such as weather reports and comedy services designed to assist on air talent 
in preparation for these shows. An example includes comedy services, 
consisting of sound bites, song parodies and fake commercials. 

     THE RADIO NETWORK--JONES RADIO 

     The Company, through its radio programming division, Jones Radio, 
provides for the programming needs of radio stations by supplying them with 
programs and services 

                                       7

<PAGE>

that individual stations may not be able to produce on their own. The Company 
offers radio stations a wide selection of regularly scheduled, syndicated 
programming as well as 24-hour continuous play formats. Because these 
programs and formats are produced by the Company, the stations have minimal 
production costs. Typically, each program is offered for broadcast by the 
Company exclusively to one station in its geographic market, which assists 
the station in competing for audience share in its local marketplace. 

     The Company enters into affiliation agreements with radio stations. 
Pursuant to these affiliation agreements, the Company typically provides 
programming to its radio affiliates in exchange for commercial airtime 
inventory which it sells to national advertisers ("barter"). With respect to 
the 24-hour formats, the Company may also receive a fee from the affiliated 
stations for the right to broadcast the formats. The Company's affiliation 
agreements for 24-hour formats are generally three years in length; long-form 
and short-form programs and service agreements are generally one year. 

     The Company has affiliation agreements with 2,300 radio stations 
throughout the United States and Canada, with approximately 700 of these 
stations receiving more than one program. The Company's programming is sold 
on an exclusive basis in the radio station's city of license. However, the 
Company is able to place different programs within the same market. There are 
currently over 100 markets in which the Company has a program on three or 
more radio stations in the market. The Company controls the production of its 
programming, allowing it to tailor its programs to respond to current and 
changing listening preferences. This high-quality, distinctive programming is 
designed to enable radio stations to improve and differentiate their on-air 
presentations and increase their ratings, thereby increasing advertising 
revenues for both the radio stations and the Company. The Company is able to 
deliver to national advertisers frequency, reach and the primary demographic 
the national advertisers target, the 25 to 54 year old adult. The Company 
currently sells advertising to over 100 national advertisers. 

     The Company sells its airtime to advertisers either as "up-front" or 
"scatter" purchases. Up-front purchases are early advertiser commitments for 
national broadcast time typically lasting 26 to 52 weeks. Scatter purchases 
are orders for a specific period of time that are typically sold at or above 
up-front market prices. Advertising prices vary significantly based on 
prevailing market conditions. The Company's strategy for growth in 
advertising revenues is to increase its audience size for its programming and 
to expand the programming it offers to radio stations.

     The Company delivers twelve 24-hour music programs that cover the types 
of major music formats used by the majority of radio stations across the 
United States. The Company has radio station affiliates in all 50 states and 
in all of the top 50 markets. This programming is designed to provide all the 
programming for the Company's affiliated radio stations, replacing their 
in-house air talent and significantly 

                                       8

<PAGE>

reducing their production costs. In order to present a localized "sound," the 
Company's air talents record unique liners and positioning statements for 
each affiliate which are cued through the satellite for broadcast at the 
local station. In addition, the programming provides local breaks for the 
radio station to insert locally sold commercials, news, weather or traffic. 
The Company is able to attract and retain programming personnel to provide 
the radio stations with a high level of experience, consistency and quality 
not available in the majority of their local markets. The Company has also 
invested in equipment with redundancy (back-up capability) that its radio 
station affiliates can rely on without going off the air due to network 
equipment problems. The radio stations provide the Company with a set amount 
of their airtime, and in some cases, fees, in exchange for the programming. 

     The Company also produces syndicated shows consisting of long-form 
programs, short-form programs, specials and services. The Company's long-form 
programs include weekly countdown shows hosted by nationally known talent 
such as Crook & Chase and music artist interview shows featuring interviews 
with popular music talents of today and yesterday. The short-form programs 
are 60 to 90 second entertainment news reports that are typically interactive 
with the affiliated radio stations, features on oldies music and a consumer 
feature hosted by national consumer advocate, David Horowitz. 

     The Company's radio programming is broadcast to over 33 million weekly 
listeners. The Company's radio network has over 90 on-air personalities, the 
majority of whom have extensive top 25 market experience. In addition, the 
Company believes that its programming management is among the best in the 
industry, consisting of format experts with over 285 years of combined radio 
experience. These program directors access music research and consultants to 
assist in creating high-quality programming. To supplement its in-house 
programming expertise, from time to time the Company enters into agreements 
to distribute distinctive, high-quality programming developed and produced by 
third party programmers. These programmers have expertise in developing 
programming for specific targeted audiences (e.g., ethnic, mature) and 
typically employ recognized talent.

     Agreements with third party programmers usually provide that the 
programmer creates and develops the radio program, while the Company markets 
the program to radio station affiliates, manages the relationship with the 
radio station affiliates, manages the sale of national advertising, and 
provides technical support and other services. The term of these license 
agreements is usually three to five years. Programming produced under these 
agreements generated approximately 16% of the Company's revenues in 1998. 

     The Company markets its radio programming directly to radio stations 
through its eleven-person affiliate sales group. These affiliate salespeople 
develop close professional relationships with the radio station affiliates in 
order to position the Company to serve the station's programming needs. The 
affiliate sales group utilizes 

                                       9

<PAGE>

industry market research and databases to identify prospective radio station 
affiliates. The in-house marketing team assists in the sales effort with 
marketing campaigns, direct mail, trade advertising and sales materials. In 
addition, the Company's presence at industry conventions and trade shows is 
designed to increase awareness of its radio programming. 

     In July 1998, the Company launched a nighttime long-form country show 
called "Nashville Nights" with CapStar, one of the top ten national radio 
groups, which is broadcast on its premiere country radio station in 
Nashville. The Company is responsible for all sales and marketing efforts and 
is a 50% owner in the venture that produces the program. 

RADIO ADVERTISING REPRESENTATION SERVICES 

     THE RADIO ADVERTISING MARKET 

     The diversity in formats and programs has intensified competition among 
stations for local advertising revenues. A radio station has two principal 
methods of effectively competing for these revenues. First, it can 
differentiate itself in its local market by selecting and successfully 
executing a format targeted at a particular audience, thus enabling 
advertisers to place their commercial messages on stations aimed at audiences 
with certain demographic characteristics. A station can also broadcast 
special programming, syndicated shows, sporting events or national news 
product not available to its competitors within its format. National 
programming broadcast on an exclusive geographic basis can help differentiate 
a station within its market and thereby enable a station to increase its 
audience and local advertising revenues. 

     Radio advertising is generally sold on the basis of a radio program's 
AQH. AQH is typically defined as the average number of persons listening to a 
particular station for at least five minutes in a 15-minute period. The AQH 
can range from zero for a small-market radio station to greater than 50,000 
for a large-market radio station, with the majority of large-market stations 
in the range of 10,000-20,000. Radio advertising time can be purchased on a 
local, national or network basis. Local purchases allow advertisers to target 
a very specific geographic area.  This type of radio advertising is ideal for 
local business with a trading area that is relatively small and well defined. 
The process of purchasing radio advertising locally is time-consuming and is 
not cost efficient for national advertisers. National spot buys are also 
targeted to specific markets and stations, but again, tend to be less cost 
efficient for the national advertiser. Advertising purchased from a radio 
network is one method by which an advertiser targets its commercial messages 
to a specific demographic audience, thereby achieving national coverage on a 
cost efficient basis. In order to increase advertising rates, it is necessary 
to increase the size (or rating) of the audience the program provider 
delivers to national advertisers. 

                                       10

<PAGE>

     MEDIAAMERICA 

     Most radio stations carry some form of syndicated programming during 
part of the day or week. This demand for syndicated programming has resulted 
in a large number of syndicated program producers, some of which on a 
standalone basis are not able to accumulate sufficient audience or national 
coverage to attract advertising revenues from national advertisers. 
MediaAmerica was created in 1987 to service these independent producers. By 
consolidating the advertising sales revenues from multiple syndicators in 
addition to MediaAmerica's owned programming, MediaAmerica has the economies 
of scale to staff a national sales organization beyond what the individual 
producers could afford on their own. Additionally, MediaAmerica has the 
ability to aggregate the commercial broadcast time of these syndicators and 
present the resulting packages for sale to national advertisers. This ability 
to aggregate time benefits the syndicators by giving them access via a 
professional sales organization to advertisers which are normally not 
interested in purchasing commercial broadcast time which does not deliver a 
specific threshold level of audience. Advertisers benefit through the ease of 
buying from one professional, larger source and the confidence that comes 
from an established multi-faceted supplier versus an independent producer. 
The producer pays the advertising sales representative firm a commission for 
the sale of the commercial broadcast time and related services such as 
inventory management, commercial scheduling, proof-of-performance 
distribution and collection. 

     As of December 31, 1998, MediaAmerica represented approximately 90 
programs or services produced by approximately 24 programmers.  In general, 
the representation agreements are up to five years in duration and provide 
for varying commissions as a percentage of net sales (the revenues from the 
sale of advertising time after deduction of the standard advertising agency 
fee). MediaAmerica also provides sales and marketing to radio station 
affiliates for certain programs. These additional services increase the 
amount of the commission MediaAmerica receives. These agreements typically 
give MediaAmerica exclusive national advertising sales rights but are 
non-exclusive with respect to the programming MediaAmerica can represent. 

     MediaAmerica has been in existence for over 11 years, and throughout 
that period has developed relationships with many major advertising agencies 
and clients. MediaAmerica's 12 advertising account executives and sales 
managers are located in six major advertising buying markets in the United 
States (New York, Los Angeles, Chicago, Detroit, Dallas and Denver). These 
account executives market the commercial broadcast time of MediaAmerica's 
producers and owned programs via personal selling to national advertisers and 
their advertising agencies. The sales team, including the principals, has an 
average of 18 years experience in the radio advertising sales and sales 
management arena. 

     In order to serve its many producers and advertising clients, 
MediaAmerica has developed a state of the art, proprietary software system 
that handles the sales proposal, commercial inventory management and order 
processing for its advertising sales. In 

                                       11

<PAGE>

addition, the Company's research department continuously analyzes a variety 
of data to provide its salespeople with accurate estimates of listening 
audiences plus creative means with which to demonstrate the particular 
advantages of the programs MediaAmerica sells, as well as network radio's 
advantages over other media. MediaAmerica utilizes audience listening data 
from Arbitron, an independent rating service, to develop its audience and 
demographic reports for all its programs. 

OTHER AUDIO SERVICES 

     The Company provides music and information audio programming designed to 
complement the video offerings of cable television system operators. The 
Company provides these services directly and through Superaudio, a joint 
venture which is owned 50% by an indirect subsidiary of the Company and 50% 
by a third party, that also programs and sells premium music programming 
directly to cable television operators and other video distributors. 
Superaudio offers nine formats of 24-hour programming that consist of six 
analog stereo music formats and three analog information and entertainment 
formats. Superaudio's term as a joint venture will expire in 2000 unless 
extended. Superaudio's programming is distributed to cable systems serving 
approximately 4 million households. 

TELEVISION PROGRAMMING--GREAT AMERICAN COUNTRY 

     THE CABLE TELEVISION MARKET 

     As of 1998, cable television was in approximately 77% of all homes in 
the United States, and approximately 81% of U.S. households with an annual 
income of at least $60,000. Industry sources indicate that in 1998 Americans 
spent $32 billion subscribing to cable services. Many advertisers consider 
cable television a cost-effective medium to reach audiences using picture, 
sound and motion at considerably cheaper rates than broadcast television. 
Total U.S. cable advertising revenues were $9 billion in 1998, a 16% increase 
from 1997. The average cable household devoted 3.7 hours a day watching 
advertising-supported basic cable television in 1998. 

     THE COUNTRY MUSIC INDUSTRY 

     According to industry sources, country music is one of the most popular 
music formats in the United States. Every week, approximately 44 million 
Americans listen to country music radio. With approximately 2,500 radio 
stations programming country music, representing approximately 24% of all 
commercial radio stations, country music has become the dominant radio format 
in the United States. Country music radio reaches 7 million more listeners 
per week than adult contemporary, the next most popular format. 

                                       12

<PAGE>

     GREAT AMERICAN COUNTRY 

     Great American Country is a 24-hour country music video network 
featuring a mix of current top country hits and past country hits. Great 
American Country was distributed to approximately 7.2 million subscribers at 
December 31, 1998. The Company believes that Great American Country offers an 
appealing programming mix with attractive economic carriage terms for cable 
system operators, including local advertising spots. Great American Country 
has six minutes per hour of national avails and four minutes per hour of 
local avails (the times available for running advertising). Great American 
Country programs an average of 14 videos per hour. Since its debut, Great 
American Country has concentrated on refining its programming and on-air 
presentation in order to broaden its carriage. Great American Country 
acquires its music videos at no cost from record companies, which use this 
medium to promote their performing artists. The Company produces or acquires 
the other programming on Great American Country. Great American Country 
targets the largest and most influential and affluent market segment of the 
country music audience--the 25-54 age group. Management believes that Great 
American Country has significantly benefited from the Company's experience in 
the country music radio programming business and is pursuing additional 
cross-promotional opportunities. 

     In order to drive subscriber growth, Great American Country generally 
offers affiliates a one-time cash launch incentive and waives license fees 
for a period which varies based on the level of subscriber commitment. The 
Company is enhancing its near-term operating cash flow through new agreements 
with two significant MSOs to issue them shares of the Company's Class A 
Common Stock in return for which Great American Country will be paid license 
fees from the date of launch. Great American Country has affiliate agreements 
with five of the ten largest MSOs, including Adelphia, Comcast, Jones 
Intercable, TCI and Time Warner, as well as the two cable programming 
cooperatives, Telesynergy, Inc. and the National Cable Television 
Cooperative, Inc. Management believes that as Great American Country 
increases its subscriber base, the Company will be able to target a broader 
group of advertisers and derive significantly higher advertising revenues 
based on traditional spot advertising as opposed to relying on direct 
response advertising. As a result, the Company believes that as its audience 
increases, it will be able to obtain a more than proportional increase in 
advertising revenues. In addition, the Company believes that by offering 
carriage incentive programs and competitive license fee rates and local 
advertising avails, it will attract additional subscribers from existing and 
new MSO affiliates that are increasingly looking to decrease costs and 
generate more advertising revenues.  There can be no assurance that the 
Company will be able to achieve any of these objectives.

     Great American Country derives its revenues from subscriber fees and 
national advertising. Typically, the average length of Great American 
Country's affiliate agreements is ten years. Monthly license fees for Great 
American Country during 1998 

                                       13

<PAGE>

were approximately $.05 per subscriber, which rate the Company believes to be 
attractive and competitive. Great American Country's affiliate agreements 
typically provide for annual escalators of $.005 per subscriber per year. 
Great American Country began selling national advertising in the last quarter 
of 1997. Great American Country's advertising sales are impacted by a variety 
of factors, including distribution, ratings, advertising rates, sellout 
ratios and the number of avails allocated for national advertising. 

TELEVISION PROGRAMMING--THE PRODUCT INFORMATION NETWORK 

     LONG-FORM ADVERTISING MARKET 

     The Company believes that, during recent years, advertisers evaluating 
the benefits of broadcast and cable television advertising have recognized 
the effectiveness and reasonable cost of long-form, informational 
programming, commonly known as infomercials. An infomercial is an 
advertisement where airtime time is paid for by the advertiser on the basis 
of the time of day the infomercial is aired and the number of homes reached. 
Infomercials are usually approximately one half-hour in length and are often 
produced in an entertainment format with high production quality. Regardless 
of the presentation format, the viewers are provided information that can be 
used to make informed purchasing decisions from their homes. 

     Increasingly, advertisers are recognizing the benefits of infomercials 
as an effective marketing tool. The Company believes that infomercials 
provide advertisers with a cost-effective medium through which to deliver 
sales messages, product introductions or demonstrations to an interested 
target audience. Advertisers are recognizing that infomercials can increase a 
company's or product's brand awareness while educating potential new 
customers. The viewer or potential consumer is provided information that can 
be used to make more informed purchasing decisions. Unlike most traditional 
television advertising, the direct response nature of many infomercials 
provides advertisers with the ability to sell products or services over the 
phone or to encourage the viewer to take other action, such as visiting a web 
site for more information or visiting a retail outlet. 

     Historically, infomercials occupied time slots that were less profitable 
for broadcasters. Increasingly, infomercials are being placed in more 
expensive and attractive time periods such as daytime, early fringe and prime 
time, and are becoming a more widely accepted form of advertising. 

     The production quality of infomercial programming by major advertisers 
has also increased the credibility of the infomercial industry. The Company 
believes that as the benefits of infomercial programming become more widely 
understood, the number of advertisers and the volume of infomercial 
programming will continue to grow. In terms of demand for airtime, major 
corporate advertisers who use long-form programming for 

                                       14

<PAGE>

image building rather than direct selling messages may ultimately surpass 
infomercial programmers who rely on immediate sales to viewers via telephone 
response. Currently, major advertisers spend only a relatively small part of 
their overall advertising budget on infomercials. The Company believes that 
such advertising expenditures will continue to increase.

     THE PRODUCT INFORMATION NETWORK 

     The Product Information Network is a satellite-delivered, long-form 
advertising programming service owned by the PIN Venture, a joint venture 
between the Company and Cox.  The Product Information Network is provided to 
cable system operators on its own dedicated channel 24 hours a day, seven 
days a week. 

     The Company developed and tested the concept of a 24-hour, long-form 
advertising network in 1993. The Company launched the Product Information 
Network in October 1993 on cable television systems owned and/or managed by 
Jones Intercable. To broaden the Product Information Network's distribution, 
the Company formed a partnership with Cox to own and operate the Product 
Information Network. Adelphia became a partner approximately one year later 
and has since exchanged its entire partnership interest for an interest in 
the Company. Both Cox and Adelphia distribute the Product Information Network 
on a number of their cable television systems.

     As of December 31, 1998, the Product Information Network was distributed 
on a full or part-time basis on cable television systems representing 
approximately 17.1 million, or approximately 26%, of the nation's cable 
subscribers on a full-or part-time basis, as well as to over 3.5 million 
broadcast households. At December 31, 1998, the Product Information Network 
was distributed to 8.6 million full-time revenue equivalent subscribers 
through 304 cable systems and broadcast affiliates. The MSOs that carry the 
network on a portion of their cable systems include the ten largest MSOs: 
including Adelphia, Cablevision, Comcast, Cox, Jones Intercable, Marcus 
Cable, Media One Group, TCI, Century Communications and Time Warner. 
Approximately 2.6 of the 3.5 million broadcast households are through KSTV in 
the Los Angeles market. The majority of the Product Information Network's 
present full-time subscriber base is provided by Cox, Adelphia and Jones 
Intercable. The standard Product Information Network affiliation agreement 
generally requires a one-year commitment of carriage. In the case of cable 
systems that are owned or operated by Cox, Adelphia or Jones Intercable, the 
affiliation agreements are for terms of five years, ten years, and ten years, 
respectively, and expire on January 31, 2000, October 1, 2005 and February 1, 
2005, respectively. 

     The Product Information Network compensates cable operators for carriage 
of the Product Information Network through a revenue sharing program. Such 
compensation, which is generally in the form of an annual rebate per 
subscriber, averages approximately 73.5% of the Product Information Network's 
adjusted net advertising 

                                       15

<PAGE>

revenues (which are revenues less agency commissions and bad debt expenses) 
attributable to the time that the system carries the network's programming. 
For 1998, the Product Information Network paid its full-time (24 hours a day) 
affiliates an average of approximately $1.45 per subscriber per year. 

     The Product Information Network's programming is produced and provided 
by its advertisers at no cost to the network. The majority of current 
programming consists of traditional infomercials from major infomercial 
producers.

SATELLITE DELIVERY AND PRODUCTION SUPPORT SERVICES 

     The Company transmits its radio and cable television programming 
directly to radio stations, cable system operators and other video 
distributors. The programming is distributed via satellite transponders 
leased from third parties and from affiliates. The Company provides playback 
services, trafficking and ground-to-satellite transmission of its programming 
services from its uplink facility in Englewood, Colorado. 

     The Company owns one full satellite transponder on each of two 
strategically positioned GE Americom satellites, Satcom C-3 and Satcom C-4, 
which deliver a variety of popular cable television programming. The Company 
utilizes advanced technology in providing uplink, playback and trafficking 
services. In January 1997, the Company installed General Instrument 
Corporation's DigiCipher II (MPEG-2) compression equipment, which increased 
the compression of its Satcom C-3 satellite transponder from 4:1 compression 
to 6:1 compression. The Company has recently installed additional equipment 
which increased the capacity to seven channels. The Company could digitally 
compress the C-3 transponder to add additional channels at minimal 
incremental cost. Any excess capacity created by this new technology could be 
used for the distribution of the Company's programming, related party 
programming or third party programming. 

     Four of the digital channels available on the Satcom C-3 satellite 
transponder are being used by Great American Country, the Product Information 
Network and two related parties. The term of each lease for such channels is 
generally for the remaining life of the satellite except that one of the 
related parties leased a channel on Satcom C-3 for a seven-year term with a 
one-time option to terminate the lease on July 1, 2001, exercisable by the 
related party on six months' advance notice. In August 1998, the Company 
entered into a lease agreement with an unrelated party to lease three digital 
channels on the Satcom C-3 transponder for the period August 15, 1998 through 
August 31, 1999. The aggregate monthly charge for the three channels 
(included related services provided by the Company) is $138,000. Although the 
lessee will have the right to renew for successive monthly periods, the 
Company does not anticipate that the lessee will renew the agreement beyond 
the original term.  The Company is currently in the process of soliciting 
prospective lessees for these three digital channels once the current lease 
agreement expires on August 31, 1999. In mid-1998, the Company leased 

                                       16

<PAGE>

the C-4 transponder to an unrelated party. This lease provides for monthly 
lease payments averaging $160,000, with higher lease payments in the early 
years of the agreement and lower lease payments in the later years. The lease 
term commenced in July 1998 and will terminate on December 31, 2002, with an 
option, exercisable by the lessee, to extend the lease through October 16, 
2004. If the lessee does not exercise the option to extend the lease, it must 
make a one-time penalty payment to the Company of $750,000. The Company's 
satellite uplinking and distribution costs are generally fixed and, as a 
result, additional radio or cable television programming can be distributed 
by the Company at minimal cost. The Company continues to market its 
additional compressible capacity on its Satcom C-3 transponder and related 
services. The Company expects that the satellite transponders will be 
effective to provide distribution for television programming until 2004, at 
which time it will be required to locate replacements to use for its 
programming. 

COMPETITION 

     RADIO NETWORK 

     The Company's radio network competes for national advertising revenues 
and radio station affiliates with major network radio distribution companies 
in the United States, as well as with a large number of smaller independent 
producers and distributors. The dominant competitors in the industry are 
affiliated with major station owners, have recognized brand names and have 
large networks which include affiliates to which such competitors pay 
compensation to broadcast the network's commercials. Moreover, beginning in 
early 1997 many of the Company's larger competitors began to consolidate, 
thereby intensifying competition. 

     In September 1997, Chancellor Media, an owner of a large group of radio 
stations, announced that it was forming a national radio network, AMFM, that 
would utilize Chancellor Media's existing talent and, in conjunction with 
CapStar Broadcasting Partners, a related party, serve over 400 radio 
stations. In January 1998, AMFM began taking one minute per hour of 
advertising time from both the Chancellor and CapStar radio stations and 
reselling the commercial time to national advertisers who typically buy 
network radio. This arrangement has diluted the pool of advertising available 
to other radio networks, including the Company's radio network. Additionally, 
AMFM's radio station line-up is concentrated in larger markets than the 
typical radio network, including those of the Company, thereby increasing its 
attractiveness to national advertisers. 

     The Company's largest direct competitors include ABC Radio Networks, 
Westwood One/CBS Radio Networks, Premiere Radio Networks and AMFM. The 
principal competitive factors in the radio industry are the quality and 
creativity of programming, the quality and quantity of the radio stations 
airing the programming and the ability to provide advertisers with a 
cost-effective method of delivering commercial 

                                       17

<PAGE>

advertisements. There can be no assurance that the Company will be able to 
compete successfully for radio advertising revenues. 

     Radio networks also face competition from improving technologies 
available to local radio stations that may enable them to pre-record their 
local announcers and automate their operations, thereby allowing them to 
reduce costs and operate more efficiently. Another technological advance, 
DARS, permits national radio stations to broadcast digital quality radio 
programming nationwide to homes, automobiles and other locations via 
satellite. In February 1997, the FCC auctioned two licenses for DARS. Both 
companies plan to launch service in the last quarter of 2000. The continued 
growth of the Internet and improvements in audio technology will provide 
another audio source competing for radio listeners.  The Company cannot 
predict what effect the potential future development of digital automation, 
DARS or the Internet will have on the radio industry or the Company.

     RADIO ADVERTISING REPRESENTATION SERVICES 

     The radio advertising representation business is highly competitive, 
both in terms of competition to gain program provider clients and to sell 
commercial inventory to national advertisers. The Company's radio advertising 
representation firm competes with the major network radio distribution 
companies, which operate divisions that both sell their own company's airtime 
inventory and also contract with third party radio programmers to sell their 
national commercial inventory. Over the last approximately two years, many 
independent program providers have been acquired by the major network 
distribution companies. These companies have large amounts of commercial 
inventory to sell and have significant resources. 

     The Company also competes on behalf of its clients for advertising 
dollars with other media such as broadcast and cable television, print, 
outdoor, the Internet and other media. The primary factors determining 
success in the radio advertising representation service industry are strong 
relationships with advertising agencies and national advertisers, acquisition 
and maintenance of representation contracts from producers with high quality 
products and experienced advertising sales personnel. 

     TELEVISION NETWORKS 

     The Company's television networks compete for distribution on cable 
systems, viewers and advertising revenues with hundreds of cable and 
broadcast television networks supplying a variety of entertainment and 
infomercial programming. 

     Great American Country's principal direct competitor is Country Music 
Television ("CMT"), an advertiser-supported basic cable network that delivers 
country music videos 24 hours a day. The Great American Country network also 
competes with The Nashville Network ("TNN"), which plays country music videos 
during a portion of the 

                                       18

<PAGE>

broadcast week. Most of TNN's music programming is focused on theater-style 
music concert programming such as the Grand Ole Opry.CBS, Inc., which owns 
the CBS broadcasting network, owns CMT and TNN. 

     The Product Information Network competes directly with at least two 
other infomercial networks: Access Television Network and GRTV, certain of 
which have greater distribution than the Product Information Network. Access 
Television Network delivers infomercial programming for use primarily during 
"remnant time." Remnant time is time that is made available by "rolling-over" 
or replacing infomercials contained in other network programming or time that 
is not used by the cable operator such as blacked out programming and unused 
leased access time. Guthy-Renker, GRTV's parent company, is a major supplier 
of infomercial programming to the Product Information Network. The Company 
believes that new infomercial networks are currently being planned or formed 
that will compete directly with the Product Information Network. The Product 
Information Network also competes with at least 30 cable television networks, 
many of which have a substantial number of subscribers, that air infomercial 
programming. 

     The Company expects to encounter additional competition for viewers as 
technological advances, such as the deployment of digital compression 
technology, the deployment of fiber optic cable and the "multiplexing" of 
cable services, allow cable systems to greatly expand their channel capacity. 
As a result, their ability to add new networks will be enhanced. In addition, 
there can be no assurance that the infomercial concept will continue to be 
acceptable to advertisers and consumers or that it will be able to compete 
against other forms of advertising. 

     SATELLITE DELIVERY AND PRODUCTION SUPPORT SERVICES 

     The Company competes in the delivery of domestic satellite services with 
satellite owners, satellite service providers, microwave carriers and full 
service teleports. Some of the Company's principal competitors, many of which 
have substantially greater financial and other resources, include TCI's 
National Digital Television Center, Vyvx Teleport, MicroNet Inc., GlobeCast, 
North America, Rainbow Network Communications, Washington International 
Teleport, Inc., Speer WorldWide Digital, Ltd. and Brewster Teleport. The 
Company believes that transmission quality, reliability, price and the 
location of uplink facilities are the key competitive factors in this market. 

     OTHER COMPETITIVE FACTORS 

     As there are generally few legal barriers or proprietary rights to 
prevent entry into the Company's markets, the Company could in the future 
face competition from new competitors offering services similar to that of 
the Company. Many of the Company's 

                                       19

<PAGE>

competitors have greater resources than the Company, and there can be no 
assurance that the Company will be able to compete successfully in the 
future. If the Company is unable to compete successfully for distribution of 
its networks and advertising revenues, the Company's operating results would 
be adversely affected.

GOVERNMENT REGULATION 

     Although the Company's radio and television networks are not generally 
directly regulated by the FCC, the radio stations and cable television 
systems and other video distributors to which the Company sells its 
programming are regulated. As a result, the federal laws and FCC regulations 
that affect these entities indirectly affect the Company. 

RISK FACTORS

     The Company's Notes are available for purchase in the market.  The 
purchase of the Notes involves certain risks.  Prospective purchasers of the 
Notes should consider carefully the risks related to, among other factors:  
(i) the Company's history of net losses, (ii) the Company's dependence upon 
earnings and cash flow of its subsidiaries, (iii) distribution of its radio 
and television programming, (iv) dependence on advertising relationships and 
revenues, (v) the fact that the Company engages in and expects to continue to 
engage in certain transactions with its affiliates, (vi) intense competition 
from various sources which affect all aspects of the Company's business and 
(vii) other information about the Company set forth in this Form 10-K Report.

                                       20

<PAGE>

                                ITEM 2. PROPERTIES 

     The Company's principal executive offices are located in Englewood, 
Colorado. The Company subleases office space from affiliates of Jones 
International, Ltd. as well as office space and studio space from third 
parties. See "Certain Transactions." In addition, the Company owns 8.4 acres 
of land in Englewood, Colorado. The Company believes its office space, studio 
space and Earth Segment's satellite uplink facility are adequate to meet its 
current needs. The following table lists the location and square footage of 
the Company's facilities and indicates whether they are owned or leased: 

<TABLE>
<CAPTION>
ENTITY UTILIZING FACILITY      LOCATIONS       SQUARE FOOTAGE   OWNED/LEASED
------------------------- -------------------  --------------   ------------
<S>                       <C>                  <C>              <C>
Earth Segment             Englewood, Colorado        13,194          Owned
Company                   Englewood, Colorado          556           Leased
Company                   Englewood, Colorado          658           Leased
Jones Radio               Englewood, Colorado         9,049          Leased
Jones Radio/Superaudio    Englewood, Colorado         2,794          Leased
Jones Radio/Superaudio    Englewood, Colorado         2,551          Leased
Jones Radio/Superaudio    Englewood, Colorado         3,102          Leased
Great American Country    Englewood, Colorado          850           Leased
PIN Venture               Englewood, Colorado         2,806          Leased
MediaAmerica              New York, New York         18,868          Leased
MediaAmerica              Chicago, Illinois            250           Leased
MediaAmerica              Milford, Connecticut        1,966          Leased
MediaAmerica              Dallas, Texas                150           Leased
MediaAmerica              Detroit, Michigan            125           Leased

</TABLE>

                             ITEM 3. LEGAL PROCEEDINGS

     From time to time, the Company is involved in routine legal proceedings 
incident to the ordinary course of its business. The Company believes that 
the outcome of all such routine legal proceedings in the aggregate will not 
have a material adverse effect on its financial condition or results of 
operations. 

            ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

                                       21

<PAGE>

                                     PART II

             ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                                STOCKHOLDERS MATTERS

     Not applicable.

                                       22

<PAGE>

                        ITEM 6. SELECTED FINANCIAL DATA

      The following table sets forth the amount of, and percentage 
relationship to total net revenues of, certain items included in the 
Company's historical consolidated statements of operations for the years 
ended December 31, 1994, 1995, 1996, 1997 and 1998, respectively:

<TABLE>
<CAPTION>
                                                                  Years Ended December 31,
                                 ----------------------------------------------------------------------------------------
                                       1994              1995               1996              1997             1998
                                 ----------------  ----------------  ----------------  ----------------  ----------------
                                                                      (In thousands)
<S>                              <C>      <C>       <C>      <C>     <C>      <C>      <C>      <C>      <C>      <C>
REVENUES:
  Radio programming............  $ 2,541     23%    $ 5,121    34%   $ 6,978     42%   $10,200     35%   $ 10,041    26%
  Radio representation.........       --     --          --    --         --     --         --     --       5,107    13
  Television programming.......    1,946     17         340     2      1,153      7     12,002     41      16,892    44
  Satellite delivery and 
    production support.........    6,805     60       9,666    64      8,523     51      6,910     24       6,172    17
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
    Total revenues.............   11,292    100      15,127   100     16,654    100     29,112    100      38,212   100
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
OPERATING EXPENSES:
  Radio programming............    2,068     18       3,068    20      4,163     25      5,816     20       7,778    20
  Radio representation.........       --     --          --    --         --     --         --     --       1,129     3
  Television programming.......    1,149     10         366     2      1,157      7      9,272     32      14,231    37
  Satellite delivery and 
    production support.........    4,546     40       6,530    43      5,451     33      4,685     16       5,240    14
  Selling and marketing........    1,090     10       1,374    10      1,737     10      2,918     10       4,869    13
  General and administrative...    1,958     17       2,322    15      3,270     20      4,168     14       6,728    18
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
    Total operating expenses...   10,811     95      13,660    90     15,778     95     26,859     92      39,975   105
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
OPERATING INCOME (LOSS)........      481      5       1,467    10        876      5      2,253      8      (1,763)   (5)
                                                                                                                    
OTHER EXPENSE..................    3,173     28       4,011    27      3,587     21      6,185     21       9,423    25
INCOME TAX PROVISION/BENEFIT 
  AND MINORITY INTERESTS.......     (389)    (3)       (498)   (3)      (396)    (2)      (439)    (1)       (264)   (1)
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
NET LOSS.......................  $(2,303)   (20%)   $(2,046)  (14%)  $(2,315)   (14)%  $(3,493)   (12)%  $(11,450)  (31)%
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
                                 -------    ---     -------   ---    -------    ---    -------    ---    --------   ---
BALANCE SHEET DATA:
  Total Assets.................  $39,196            $36,352          $38,298           $41,358           $110,894
  Total long-term debt.........   52,667             53,476           53,277            45,312            100,000
  Shareholders' deficit........  (16,302)           (20,360)         (23,269)          (18,206)           (11,333)

</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
        RESULTS OF OPERATIONS

      The following discussion of results of operations and financial 
condition should be read in conjunction with the Company's historical 
consolidated financial statements and notes thereto appearing elsewhere in 
this Form 10K. This document contains forward-looking statements that involve 
risks and uncertainties.

CONSOLIDATION OF PIN VENTURE

     From February 1995 until March 31, 1997, the Company owned 50 percent or 
less of the PIN Venture. Effective April 1, 1997, the Company acquired from 
Adelphia Communications Corporation an 8.35 percent equity interest in the 
PIN Venture in exchange for 262,500 shares of the Company's Class A Common 
Stock. Effective December 31, 1998, the Company acquired the remaining 
Adelphia Communications Corporation equity interest in the PIN Venture, 2.18 
percent, in exchange for 12,416 shares of the Company's Class A Common Stock. 
As a result of these transactions, which were accounted for as a purchase, 
the Company now owns approximately 55.3 percent of the PIN Venture. Effective 
April 1, 1997, the Company consolidated the results of operations of the PIN 
Venture for financial reporting purposes.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

     TOTAL REVENUES--Total revenues increased $9.1 million, or 31%, from 
$29.1 million for the year ended December 31, 1997 to $38.2 million for the 
year ended December 31, 1998. This increase was due primarily to (i) the 
acquisition of MediaAmerica, (ii) an increase in Great American Country 
advertising revenues and (iii) revenues resulting from the consolidation of 
the PIN Venture.

                                       23

<PAGE>

     RADIO PROGRAMMING REVENUES--Radio programming revenues decreased $0.2 
million, or 2%, from $10.2 million for the year ended December 31, 1997 to 
$10.0 million for the year ended December 31, 1998, due to a $1.4 million, or 
15%, decrease in advertising revenues as offset by a $1.2 million increase in 
radio programming revenues as a result of the MediaAmerica acquisition. Sales 
of radio advertising for 1998 were adversely affected by the entry in January 
1998 of AMFM into the marketplace, which added approximately 20% more radio 
advertising inventory to the marketplace, thereby increasing competition for 
network radio advertising dollars. Additionally, AMFM has been able to shift 
the focus of network radio advertisers to its radio network which delivers 
larger market radio stations as compared to the radio stations delivered by 
the Company's radio network. During 1998, the Company realized lower rates as 
compared to 1997. The decrease was partially offset by the elimination of 
$1.0 million in advertising sales representation selling commissions (contra 
revenues) charged by MediaAmerica and an $0.2 million increase in promotion 
income, both related to the acquisition of MediaAmerica. Licensing revenues 
remained relatively stable, reflecting the Company's strategy to focus on 
radio station affiliates with significant audiences, which are generally not 
charged a license fee.

     During late 1998, the Company began to experience improved advertising 
rate and sellout conditions and these trends have continued into early 1999. 
As a result of increased competition, as well as other changes occurring in 
the network radio advertising marketplace in 1998, the Company is continuing 
to focus its efforts on strategies to increase the amount it received per 
radio advertising spot and its sellout percentage. One significant area of 
concentration is the development of personality driven talk programs, which 
the Company believes will appeal to both advertisers of and listeners to the 
Company's radio programs. However, there can be no assurance that this and 
other strategies the Company is focusing on will be successful in increasing 
radio programming revenues or that network radio advertising market 
conditions will continue to improve.

     RADIO ADVERTISING REPRESENTATION REVENUES--As the result of the 
acquisition of MediaAmerica, the Company generated radio representation 
revenues of $5.1 million for the year ended December 31, 1998.

     TELEVISION PROGRAMMING REVENUES--Television programming revenues 
increased $4.9 million, or 41%, from $12.0 million for the year ended 
December 31, 1997 to $16.9 million for the year ended December 31, 1998, due 
primarily to: (i) the consolidation of the PIN Venture which for financial 
statement reporting purposes resulted in an increase of $3.3 million in 
advertising revenues, (ii) an increase of $0.3 million in advertising 
revenues on the Product Information Network as a result of the increase in 
the number of subscribers receiving its programming, (iii) an increase of 
$0.9 million in Great American Country advertising revenues due to higher 
advertising rates being charged for airtime as a result of an increase in the 
number of its subscribers, and (iv) an increase of $0.4 million in Great 
American Country affiliate fees due to an increase in the number of its 
subscribers paying affiliate fees.

     SATELLITE DELIVERY AND PRODUCTION SUPPORT REVENUES--Satellite delivery 
and production support revenues decreased $0.7 million, or 11%, from $6.9 
million for the year ended December 31, 1997 to $6.2 million for the year 
ended December 31, 1998 due to (i) the expiration in October 1997 of a third 
party satellite delivery and production support services agreement, which had 
generated $2.6 million in satellite delivery revenues in 1997, and (ii) the 
consolidation of the PIN Venture, which for financial statement reporting 
purposes resulted in the elimination of $0.4 million in satellite delivery 
revenues. This decrease was partially offset by (i) new satellite delivery 
and production support agreements that the Company entered into with third 
parties in 1998 resulting in revenues of $1.4 million and (ii) an increase in 
satellite delivery and production support fees of $0.9 million charged to 
related parties.

     TOTAL OPERATING EXPENSES--Total operating expenses increased $13.1 
million, or 49%, from $26.9 million for year ended December 31, 1997 to $40.0 
million for the year ended December 31, 1998. This increase was due primarily 
to increases in radio programming, radio advertising representation, 
television 

                                       24

<PAGE>

programming, selling and marketing and general and administrative expenses. 
As a percentage of total revenues, total operating expenses increased from 
92% for the year ended December 31, 1997 to 105% for the year ended December 
31, 1998.

      RADIO PROGRAMMING EXPENSES--Radio programming expenses increased $2.0 
million, or 34%, from $5.8 million for the year ended December 31, 1997 to 
$7.8 million for the year ended December 31, 1998. Programming expenses 
increased due to (i) an increase in the number of formats and syndicated 
programs offered by the Company and (ii) the acquisition of MediaAmerica. The 
Company expects to implement cost reductions such as (i) consolidating its 
programming, (ii) using voice tracking and other technology to reduce 
programming costs and (iii) reducing overhead. As a percentage of radio 
programming revenues, radio programming expenses increased from 57% for the 
year ended December 31, 1997 to 77% for the year ended December 31, 1998.

      RADIO ADVERTISING REPRESENTATION EXPENSES--As a result of the 
acquisition of MediaAmerica, the Company generated radio representation 
expenses of $1.1 million for the year ended December 31, 1998.

      TELEVISION PROGRAMMING EXPENSES--Television programming expenses 
increased $5.0 million, or 53%, from $9.3 million for the year ended December 
31, 1997 to $14.3 million for the year ended December 31, 1998, due to the 
consolidation of the PIN Venture and the increase in amounts paid to cable 
systems receiving the Product Information Network. For the years ended 
December 31, 1997 and 1998, the PIN Venture made rebate payments to these 
systems of approximately $7.8 million and $10.3 million, respectively. The 
increase was offset by the decrease in allocation of the satellite delivery 
and production support expenses attributable to the Production Information 
and the Great American Country Networks. As a percentage of television 
programming revenues, television programming expenses increased from 77% for 
the year ended December 31, 1997 to 84% for the year ended December 31, 1998.

      SATELLITE DELIVERY AND PRODUCTION SUPPORT EXPENSES--Satellite delivery 
and production support expenses increased $0.5 million, or 12%, from $4.7 
million for the year ended December 31, 1997 to $5.2 million for the year 
ended December 31, 1998. The increase was due primarily to a decrease in the 
allocation of satellite delivery and production support expenses to 
television programming expenses attributable to the Production Information 
and Great American Country networks as a result of the additional satellite 
delivery and production support customers. As a percentage of satellite 
delivery and production support revenues, satellite delivery and production 
support expenses increased from 68% for the year ended December 31, 1997 to 
85% for the year ended December 31, 1998, due to the expiration in October 
1997 of a third party satellite delivery and product support service 
agreement and to increased satellite delivery and production support expenses.

      SELLING AND MARKETING EXPENSES--Selling and marketing expenses 
increased $2.0 million, or 67%, from $2.9 million for the year ended December 
31, 1997 to $4.9 million for the year ended December 31, 1998 because of (i) 
an increase of $1.2 million due to the acquisition of MediaAmerica, (ii) an 
increase of $0.7 million in marketing expenditures incurred to increase Great 
American Country's distribution and (iii) an increase of $0.1 million due to 
the consolidation of the PIN Venture. As a percentage of total revenues, 
selling and marketing expenses increased from 10% for the year ended December 
31, 1997 to 13% for the year ended December 31, 1998.

      GENERAL AND ADMINISTRATIVE EXPENSES--General and administrative 
expenses increased $2.5 million, or 61%, from $4.2 million for the year ended 
December 31, 1997 to $6.7 million for the year ended December 31, 1998 due 
primarily to (i) an increase of $1.7 million due to the acquisition of 
MediaAmerica (ii) an $0.3 

                                       25

<PAGE>

million increase in amortization expenses related to the amortization of 
goodwill associated with the acquisition of MediaAmerica, (iii) an $0.3 
million increase in the amortization of subscriber incentive payments for 
Great American Country. As a percentage of total revenues, general and 
administrative expenses increased from 14% for the year ended December 31, 
1997 to 18% for the year ended December 31, 1998.

      TOTAL OTHER EXPENSE--Total other expense increased $3.2 million, or 
52%, from $6.2 million for the year ended December 31, 1997 to $9.4 million 
for the year ended December 31, 1998. The increase was due to an increase of 
$5.6 million in interest expense related to the Notes, an increase of $0.6 
million in other expense related to the Jones Radio Holdings LLC credit 
facility (see "Liquidity and Capital Resources") and an increase of $0.4 
million of expenses incurred in 1998 related to the MediaAmerica acquisition 
and the Notes offering, as offset partially by a write-off of deferred 
offering costs of $0.9 million in 1997 for which no similar expense was 
incurred in 1998. The increase was also partially offset by the decrease in 
interest expense related to the repayment of the Global Group Note, the Earth 
Segment Note and the satellite transponder capital leases which totaled $2.5 
million.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO DECEMBER 31, 1996

      TOTAL REVENUES--Total revenues increased $12.4 million, or 75%, from 
$16.7 million for the year ended December 31, 1996 to $29.1 million for the 
year ended December 31, 1997. This increase was due primarily to increases in 
both television and radio programming revenues. The increase in television 
programming revenues is due primarily to (i) the consolidation of the PIN 
Venture and (ii) a 98% increase in the number of Great American Country's 
subscribers from December 31, 1996 to December 31, 1997. The increase in 
radio programming revenues is due to a 5% increase in the number of radio 
affiliates receiving the Company's programming from December 31, 1996 to 
December 31, 1997.

      RADIO PROGRAMMING REVENUES--Radio programming revenues increased $3.2 
million, or 46%, from $7.0 million for the year ended December 31, 1996 to 
$10.2 million for the year ended December 31, 1997 due to a $3.2 million, or 
52%, increase in advertising revenues. Advertising revenues increased due 
primarily to an increase in the rates charged by the Company for its 
advertising spots as a result of favorable network radio advertising 
conditions and increases in AQH for certain radio programs. Licensing 
revenues remained relatively stable, reflecting the Company's strategy to 
focus on radio station affiliates with significant audiences, which are 
generally not charged a license fee.

      TELEVISION PROGRAMMING REVENUES--Television programming revenues 
increased $10.8 million, or 940%, from $1.2 million for the year ended 
December 31, 1996 to $12.0 million for the year ended December 31, 1997, due 
primarily to: (i) an increase of $10.4 million in advertising revenues due to 
the consolidation of the PIN Venture and (ii) an increase in Great American 
Country advertising and license revenues of $0.4 million due primarily to 
higher advertising rates being charged for airtime on Great American Country 
as a result of an increase in the number of subscribers receiving Great 
American Country's programming, a decrease in the amount of unsold airtime, 
and an 84% increase in the number of sold direct response paid spots.

      SATELLITE DELIVERY AND PRODUCTION SUPPORT REVENUES--Satellite delivery 
and production support revenues decreased $1.6 million, or 19%, from $8.5 
million for the year ended December 31, 1996 to $6.9 million as reported for 
the year ended December 31, 1997 due primarily to the expiration in October 
1997 of a third party satellite delivery and production support services 
agreement and the consolidation of the PIN 

                                       26

<PAGE>

Venture. The decrease was partially offset by an increase in production 
support fees charged to related parties.

      TOTAL OPERATING EXPENSES--Total operating expenses increased $11.1 
million, or 70%, from $15.8 million for the year ended December 31, 1996 to 
$26.9 million for the year ended December 31, 1997. This increase was due to 
increases in television programming expenses, radio programming expenses, 
selling and marketing and general and administrative expenses. These 
increases, excluding radio programming, were primarily due to the 
consolidation of the PIN Venture. As a percentage of total revenues, total 
operating expenses decreased from 95% for the year ended December 31, 1996 to 
92% for the year ended December 31, 1997.

      RADIO PROGRAMMING EXPENSES--Radio programming expenses increased $1.6 
million, or 40%, from $4.2 million for the year ended December 31, 1996 to 
$5.8 million for the year ended December 31, 1997 due primarily to an 
increase in programming production and distribution expenses. Programming 
production expenses increased approximately $1.4 million due to an increase 
in the number of formats and syndicated programs offered by the Company. 
Programming distribution expenses, such as the satellite transponder and 
uplink expenses, increased approximately $0.2 million due to an increase in 
the costs of distributing the new formats and syndicated programs offered by 
the Company. As a percentage of radio programming revenues, radio programming 
expenses decreased from 60% for the year ended December 31, 1996 to 57% for 
the year ended December 31, 1997.

      TELEVISION PROGRAMMING EXPENSES--Television programming expenses 
increased $8.1 million, or 701%, from $1.2 million for the year ended 
December 31, 1996 to $9.3 million for the year ended December 31, 1997, due 
primarily to the consolidation of the PIN Venture. As a percentage of 
television programming revenues, television programming expenses decreased 
from 100% for the year ended December 31, 1996 to 77% for the year ended 
December 31, 1997.

      SATELLITE DELIVERY AND PRODUCTION SUPPORT EXPENSES--Satellite delivery 
and production support expenses decreased $0.8 million, or 14%, from $5.5 
million for the year ended December 31, 1996 to $4.7 million for the year 
ended December 31, 1997 due primarily to the launch in late 1995 of Great 
American Country and allocation of the satellite delivery and production 
support expenses attributable to Great American Country to television 
programming expenses from satellite delivery and production support expenses. 
As a percentage of satellite delivery and production support revenues, 
satellite delivery and production support expenses increased from 64% for the 
year ended December 31, 1996 to 68% for the year ended December 31, 1997.

      SELLING AND MARKETING EXPENSES--Selling and marketing expenses 
increased $1.2 million, or 68%, from $1.7 million for the year ended December 
31, 1996 to $2.9 million for the year ended December 31, 1997 due primarily 
to an increase in marketing expenditures of approximately $0.7 million 
related to the Company's radio programming marketing activities, an increase 
in marketing expenditures of approximately $0.1 million related to the 
Company's television programming marketing activities and an increase in 
marketing expenditures of approximately $0.4 million related to the 
consolidation of the PIN Venture. As a percentage of total revenues, selling 
and marketing expenses remained relatively stable at 10% for the years ended 
December 31, 1996 and 1997.

      GENERAL AND ADMINISTRATIVE EXPENSES--General and administrative 
expenses increased $0.9 million, or 27%, from $3.3 million for the year ended 
December 31, 1996 to $4.2 million for the year ended December 31, 1997 due 
primarily to the consolidation of the PIN Venture. As a percentage of total 
revenues, general 

                                       27

<PAGE>

and administrative expenses decreased from 20% for the year ended December 
31, 1996 to 14% for the year ended December 31, 1997.

      TOTAL OTHER EXPENSE--Total other expense increased $2.6 million from 
$3.6 million for the year ended December 31, 1996 to $6.2 million for the 
year ended December 31, 1997. The increase was due to a write-off of deferred 
offering costs of approximately $0.9 million, an increase of approximately 
$1.2 million in interest expense relating to the Jones Global Group Note and 
an increase of approximately $0.5 million in interest expense relating to 
advances from Jones International.

SEASONALITY AND QUARTERLY FLUCTUATIONS

      Advertising revenues in the radio and cable television industries 
fluctuate due to seasonality in such industries. The Company believes that 
radio network revenues are typically lowest in the first quarter and cable 
television network revenues are typically lowest in the third quarter. As a 
result of the acquisition of MediaAmerica, the Company expects that its 
seasonal trend of lower first quarter revenues will be more significant. 
Other than the fees paid by the Company to third parties for certain of its 
radio programming, the fees paid by the Company in connection with the 
distribution of the Product Information Network and the sales commissions 
paid to account executives for radio and advertising representation sales, 
the Company's expenses have not historically varied significantly relative to 
the seasonal fluctuation of revenues. The Company's quarterly and annual 
results of operations are affected by a wide variety of factors, many of 
which are outside the Company's control, and could materially and adversely 
affect profitability. These factors include the timing and volume of 
advertising on the Company's radio network and cable television networks, the 
number and size of the radio stations that carry the Company's radio 
programming, the number and size of cable systems and other video 
distributors that carry the Product Information Network and Great American 
Country, and general economic conditions.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's ability to successfully implement its growth strategies 
is subject to the availability of cash generated from operations and equity 
and/or debt financing. On a pro forma basis to reflect the placement of the 
Notes and the use of the proceeds therefrom, the Company had cash and cash 
equivalents of $20.7 million (as of December 31, 1998), including $10.0 
million of cash set aside in the Reserve Account, and will be limited by the 
Indenture in its ability to enter into other debt financing. There can be no 
assurance that the Company will have sufficient cash flow from operations 
after debt service to support these strategies in the long term. In addition, 
there can be no assurance that the capital resources necessary to accomplish 
the Company's growth strategies over the long term will be available or, if 
available, will be on terms and conditions acceptable to the Company.

      Since its inception, the Company has incurred net losses primarily as a 
result of expenses associated with developing and launching its programming 
networks. Net cash provided by (used in) operating activities for the years 
ended December 31, 1996, 1997, and 1998 was $4.8 million, $7.6 million and 
($7.3) million, respectively. Net cash provided by (used in) operating 
activities decreased for the year ended December 31, 1998 in part because of 
modest revenue growth and significantly higher expenses during the period, as 
described above. Net cash used in operating activities for the year ended 
December 31, 1998 also includes the net repayment of $8.4 million of advances 
from Jones International.

                                       28

<PAGE>

      For the years ended December 31, 1996, 1997, 1998, net cash used in 
investing activities was $4.0 million, $1.2 million, and $35.0 million, 
respectively. The Company's investing activities in 1996 related primarily to 
the conversion of the delivery system of its radio programming networks to a 
digital satellite delivery system and the purchase of automated playback and 
other equipment for Great American Country. In addition, the Company invested 
$1.0 million in a radio programming venture, Jones/Owens Radio Programming 
LLC, in October 1996. The Company's 1997 net capital expenditures of 
approximately $1.4 million were primarily related to the completion of the 
conversion to a digital satellite delivery system and to the purchase of the 
equipment to effect the digital compression of one of the Company's satellite 
transponders. The Company's investing activities in 1998 related primarily to 
the acquisition of MediaAmerica with cash consideration of $26.7 million. 
Total capital expenditures of $2.3 million for 1998 were primarily related to 
equipment to further compress the Satcom C-3 satellite transponder and to add 
radio formats and programming. In 1998, the Company also made subscriber 
incentive payments for Great American Country of $3.1 million.

      Net cash provided by (used in) financing activities for the years ended 
December 31, 1996, 1997 and 1998 were ($0.8) million, $(2.7) million and 
$59.3 million, respectively. For these periods, the Company's financing 
activities consisted primarily of proceeds from the issuance of Senior 
Secured Notes, borrowings under the Credit Facility (as defined below) and 
from related parties and repayments of a capital lease obligation and loans 
from related parties.

      In July 1998, the Company issued $100 million of 11 3/4 percent Senior 
Secured Notes. The Company used the proceeds from the Notes offering (i) to 
finance the cash consideration of the acquisition of MediaAmerica, (ii) to 
prepay the capital lease obligation relating to the satellite transponders, 
(iii) to repay the Credit Facility and (iv) for general corporate purposes, 
including the payment of fees and expenses.

      Effective August 15, 1996, the Company purchased all of the outstanding 
common stock of Galactic Radio from Global Group for $17.2 million. Global 
Group had acquired Galactic Radio from Jones Intercable, a related party, for 
$17.2 million on June 14, 1996. The purchase price was paid using $1.2 
million in cash, which was advanced to the Company by Jones International, 
with the balance paid in the form of a $16.0 million note. Effective 
September 30, 1997, $6.0 million of the $16.0 million note payable to Global 
Group was converted into 400,000 shares of the Company's Class B Common Stock 
at $15 per share. Effective upon the closing of the offering of the Notes, 
the remaining $10 million of the Jones Global Group Note was converted into 
666,667 shares of Class A Common Stock valued at $15 per share.

      In July 1998, the Company acquired substantially all of the assets and 
liabilities of MediaAmerica. Pursuant to the Acquisition, MediaAmerica 
received $26.7 million in cash and $6.0 million in shares of Class A Common 
Stock of the Company. MediaAmerica also received approximately 142,000 
additional shares of Class A Common Stock, valued at $15 per share, as the 
estimated working capital adjustment calculated on the date of closing. In 
addition, MediaAmerica may receive up to $5 million in additional shares of 
Class A Common Stock, with the excess, if any, to be paid in cash, pursuant 
to the Earnout.

      In March 1998, Jones Radio Holdings, LLC entered into a five year $30 
million secured revolving credit facility with a commercial bank (the "Credit 
Facility"). Borrowings under the credit facility bore interest at a maximum 
of LIBOR plus 2.875% (approximately 7.9% at June 30, 1998). Borrowings of 
$16.7 million under the credit facility were outstanding as of June 30, 1998. 
The Credit Facility was terminated in connection with the offering of the 
Notes. Borrowings of $16.3 million under the credit facility were used to 
repay a $6.6 million note payable to Jones Intercable and to repay $9.7 
million in advances from Jones 

                                       29

<PAGE>

International. In July 1998, the Company repaid the credit facility, using 
the proceeds from the Notes offering.

      The Company has received advances and loans from Jones International 
and related companies to fund its operating and investing activities in the 
past. Outstanding advances from Jones International and related parties at 
December 31, 1998 were approximately $1.4 million. The Company intends to 
repay these advances with cash flow from operations and/or available cash 
balances. Jones International and such related companies are under no 
obligation to provide additional advances or loans to the Company.

      The Company historically financed its ownership of two analog satellite 
transponders through a capital lease agreement. This agreement was fully 
prepaid with $27.6 million of the proceeds of the offering of the Notes. The 
channel capacity on one satellite transponder has been digitally compressed 
to seven channels, four of which are currently leased to Product Information 
Network, Great American Country and two related parties. This transponder 
could now be digitally compressed into additional channels if demand 
warranted. The Company has leased the other three digital channels and 
certain related services to a third party until August 31, 1999, subject to 
early termination at the option of the Company. The revenues from this lease 
are $138,000 per month. In addition, the Company has leased the C-4 satellite 
transponder to a third party beginning July 1998, and one digital channel and 
certain related services to an affiliate beginning July 1, 1998. These 
agreements will generate revenues of approximately $160,000 and $97,000 per 
month, respectively.

      Pursuant to the terms of one GAC Equity Agreement, an MSO was granted a 
put option in respect of the shares of Class A Common Stock that may be 
issued to it under such agreement. The put option provides that, if as of 
December 31, 2001, the Company or its successor has not completed a public 
offering of its securities, the MSO may within 60 days of such date require 
the Company to purchase its Class A Common Stock. If the put election is 
made, the Company or its successor would be required to purchase the Class A 
Common Stock at a price equal to all or a portion of the license fees that 
would have been paid during the period between the date of the agreement and 
the exercise date of the put option. The purchase price would be based on the 
total number of MSO subscribers receiving Great American Country as of 
December 31, 1998. The estimated purchase price of the Class A Common Stock 
in the event the put option is exercised would be approximately $1,020,000. 
The Company intends to continue to enter into similar arrangements in the 
future, to the extent permitted under the terms of the Indenture.

      The Company depends, and will continue to depend, significantly upon 
the earnings and cash flows of, and dividends and distributions from, its 
subsidiaries to pay its expenses, meet its obligations and pay interest and 
principal on the Notes and its other indebtedness. The terms of the Company's 
joint ventures generally require the mutual consent of the Company and its 
joint venture partners to distribute or advance funds to the Company. There 
are no significant contractual restrictions on distributions from each of the 
Subsidiary Guarantors (as defined) to the Company. Management believes that 
its available cash balances along with operating cash flow, including the cash 
flows of, and dividends and distributions from its subsidiaries will be 
sufficient to fund the Company's capital needs through at least December 31, 
1999. The Company deposited $10.0 million of the proceeds of the offering of 
the Notes in a Reserve Account, from which approximately $5.6 million was 
used to pay interest on the Notes in January 1999. The Company intends to use 
the remaining proceeds in the Reserve Account for payment of interest on the 
Notes.

      Total capital expenditures for 1999 are estimated to be $1.6 million, 
which will be used primarily to purchase equipment to further digitally 
compress the Satcom C-3 satellite transponder, upgrades of certain radio 
programming studios and to purchase satellite receivers. Total subscriber 
incentive payments for Great American Country in 1999 are estimated to be 
$4.0 million.

                                       30

<PAGE>

      Upon the sale of Mr. Jones' interest in Jones Intercable, Jones 
Intercable will no longer share in many of the administrative and related 
expenses which have historically been shared by the various entities 
affiliated with Mr. Jones, including the Company. Because Jones Intercable is 
the largest of such sharing entities, its exclusion from the allocation 
process will cause the Company to incur material increases beginning in the 
second half of 1999 in certain overhead and related costs, including computer 
services, insurance, and personnel costs for accounting, legal, risk 
management and human resources services.

IMPACT OF THE YEAR 2000 ISSUE

      The Year 2000 issue is the result of many computer programs being 
written such that they will malfunction when reading a year of "00." This 
problem could cause system failure or miscalculations causing disruptions of 
business processes.

      The Company initiated an assessment of how the Year 2000 problem could 
affect its operations in the summer of 1997 and, in conjunction with related 
parties, established a Year 2000 Program Office (the "Y2K Office") to manage 
the process. The Y2K Office meets periodically with the Company's management 
to inform them of its assessment activities, the Year 2000 priorities it has 
identified, remediation recommendations and testing and compliance issues. In 
addition, the Y2K Office organized and meets regularly with a review 
committee comprised of representatives from various departments within the 
Company to ensure that management from the affected areas participate in the 
decision process.

      The Y2K Office is currently implementing the steps needed to address 
the Year 2000 problem based upon its set priorities and is testing the 
implemented solutions. The Y2K Office's schedule for implementing and testing 
its Year 2000 solutions for systems that have been determined to be first 
priority for the Company is as follows:

<TABLE>
<CAPTION>
                                                                                                  EXPECTED
PROJECT                                                        DESCRIPTION                    COMPLETION DATE
-------                                                        ------------                   ---------------
<S>                                                    <C>                                    <C>
Financial Information Management System..............  Test for Y2K compliance                      1Q99

Human Resources Information System...................  Test for Y2K compliance                      2Q99

Unix Hardware and Software...........................  Upgrade to Y2K compliant
                                                          releases and test for compliance          1Q99

Local Area Network ("LAN") and Wide Area               Determine which components are
   Network ("WAN") Components........................     not Y2K compliant                         1Q99

LAN/WAN Hardware and Software........................  Upgrade to Y2K compliant
                                                          releases and test for compliance          2Q99

Telephony Systems....................................  Upgrade to Y2K compliant
                                                          releases and test for compliance          1Q99

GAC and PIN Network Traffic and Billing System.......  Y2K certification testing                    1Q99

Uplink and Broadcast Center..........................  Y2K certification testing                    2Q99

</TABLE>

      In 1999, the Y2k Office will also focus on Year 2000 compliance issues 
with respect to other systems, such as desktop hardware and software, data 
archiving systems, traffic and billing reconciliation 

                                       31

<PAGE>

applications and other record management systems. The Company has not used, 
and does not plan to employ, unaffiliated third party verification and 
validation processes to assure the reliability of its risk and cost 
estimates. The Company has not deferred any other significant information 
technology projects due to Year 2000 efforts.

      The Y2k Office commenced contacting vendors of application and 
operation system software in 1997 and continues to work with vendors through 
industry groups focused on Year 2000 issues. The Company has not yet 
determined the extent to which it is vulnerable to the failure by vendors and 
customers that have a material relationship with the Company to remediate 
Year 2000 compliance issues. Management believes, but makes no assurance, 
that the Company does not supply to third parties systems or equipment that 
may cause a Year 2000 problem.

      The Company has not incurred any material Year 2000 costs to date. 
Management does not have an estimate for future Year 2000 project costs will 
not have a material adverse effect on its financial condition and results of 
operations.

      The Company has not yet formulated contingency plans in the event that 
systems are not Year 2000 compliant. The Company recognizes the need for a 
contingency plan and plans to develop one by the second quarter of 1999. 
There can be no assurance that the Company's systems will be Year 2000 
compliant in time. The Year 2000 issue poses many risks for the Company and 
could materially adversely affect its financial condition and results of 
operations.

     ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       Market risk represents the risk of loss that may impact the financial 
position, results of operations, or cash flows of the Company due to adverse 
changes in financial market prices. The Company is exposed to market risk 
through interest rates. This exposure is directly related to its normal 
funding and investing activities.

      Approximately $1.4 million of the Company's borrowed debt is subject to 
changes in interest rates; however, the Company does not use derivatives to 
mange this risk. This exposure is linked primarily to the prime rate. The 
Company believes that a moderate change in the prime rate would not 
materially affect operating results or financial condition of the Company.

                                       32
<PAGE>

              ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                 ----
<S>                                                                                             <C>
Report of Independent Public Accountants                                                          34

Consolidated Statements of Financial Position                                                     35

Consolidated Statements of Operations                                                             37

Consolidated Statements of Changes in Shareholders' Deficit                                       38

Consolidated Statements of Cash Flows                                                             39

Notes to Consolidated Financial Statements                                                        40
</TABLE>

                                       33
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Jones International Networks, Ltd.:

     We have audited the accompanying consolidated statements of financial 
position of Jones International Networks, Ltd. (a Colorado corporation) and 
its subsidiaries (collectively, the "Company") as of December 31, 1997 and 
1998 and the related consolidated statements of operations, changes in 
shareholders' deficit and cash flows for each of the three years ended 
December 31, 1998. These financial statements are the responsibility of the 
Company's management. Our responsibility is to express an opinion on these 
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit, also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Jones International 
Networks, Ltd. and its subsidiaries as of December 31, 1997 and 1998, and the 
results of their operations and their cash flows for each of the three years 
ended December 31, 1998 in conformity with generally accepted accounting 
principles.

                               Arthur Andersen LLP

Denver, Colorado
  February 11, 1999

                                       34
<PAGE>


              JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                -----------------------------
                                                                                    1997            1998
                                                                                ------------     ------------
<S>                                                                             <C>              <C>
                                   ASSETS

CURRENT ASSETS:

     Cash and cash equivalents.............................................      $ 3,717,169      $10,654,013
     Restricted cash.......................................................               --       10,000,000
     Available for sale securities.........................................               --        2,768,646
     Accounts receivable, net of allowance for doubtful accounts
        of $157,405 and $897,487, respectively.............................        1,454,763       11,835,108
     Receivables from affiliates...........................................               --          238,777
     Prepaid expenses......................................................           54,870          255,723
     Deferred commissions, current (Note 2)................................          222,302          221,973
     Other current assets..................................................          263,267          178,322
                                                                                ------------     ------------
          Total current assets.............................................        5,712,371       36,152,562
                                                                                ------------     ------------
PROPERTY, PLANT AND EQUIPMENT (Note 2):
     Land..................................................................        1,395,592        1,395,592
     Building..............................................................        2,321,463        2,321,463
     Satellite transponders (Note 14)......................................       35,010,454       35,680,188
     Furniture, fixtures and equipment.....................................       10,457,665       12,442,773
     Leasehold improvements................................................          374,643          738,838
                                                                                ------------     ------------
          Total property, plant and equipment..............................       49,559,817       52,578,854
                                                                                ------------     ------------
             Less accumulated depreciation and amortization................      (20,784,095)     (25,681,974)
                                                                                ------------     ------------
          Net property, plant and equipment................................       28,775,722       26,896,880
                                                                                ------------     ------------
OTHER ASSETS:
     Goodwill, net of accumulated amortization of $171,795
         and $719,588, respectively (Note 2)...............................        3,125,567       32,397,394
     Subscriber incentive payments, net of accumulated
        amortization of $0 and $326,969, respectively......................               --        4,355,170
     Investment in programming, net of accumulated
        amortization of $0 and $177,777, respectively......................               --        2,379,402
     Other intangible assets, net of accumulated amortization of
        $733,428 and $1,030,391, respectively (Note 2).....................        1,063,888        1,914,043
     Investment in affiliates..............................................          577,264          202,942
     Income tax benefit receivable from Jones International, Ltd.(Note 13).        1,342,111        1,338,402
     Deferred commissions, long-term (Note 2)..............................          478,676          390,336
     Debt offering costs, net of accumulated amortization of $0
        and $245,700, respectively (Note 2)................................          224,744        4,526,428
     Other assets..........................................................           57,785          340,475
                                                                                ------------     ------------
          Total other assets...............................................        6,870,035       47,844,592
                                                                                ------------     ------------
          Total assets.....................................................      $41,358,128    $ 110,894,034
                                                                                ------------     ------------
                                                                                ------------     ------------
</TABLE>

       The accompanying notes to these consolidated financial statements are an 
             integral part of these consolidated financial statements.

                                       35
<PAGE>

                 JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>

                                                                                        DECEMBER 31,
                                                                                -----------------------------
                                                                                    1997            1998
                                                                                ------------     ------------
<S>                                                                             <C>              <C>
                  LIABILITIES AND SHAREHOLDERS' DEFICIT

     CURRENT LIABILITIES:

        Accounts payable--trade...........................................      $ 1,438,602     $  2,796,389
        Producers' fees payable...........................................               --        5,922,471
        Subscriber incentive payments payable.............................               --        1,617,815
        Accrued liabilities...............................................        1,300,516        2,047,233
        Accounts payable--Jones International, Ltd. (Notes 2 and 4).......        9,814,874        1,377,731
        Interest payable..................................................           53,619        5,581,250
        Deferred revenues (Note 2)........................................           13,554          752,263
        Capital lease obligations (Note 7)................................        2,422,022               --
        Other current liabilities.........................................               --            9,938
                                                                                ------------     ------------
             Total current liabilities....................................       15,043,187       20,105,090
                                                                                ------------     ------------
     LONG-TERM LIABILITIES

        Customer deposits and deferred revenues...........................           38,532          340,842
        Capital lease obligation, net of current portion (Note 7).........       26,335,186               --
        Long-term debt--affiliated entities (Note 5)......................       16,554,500               --
        Senior secured notes..............................................               --      100,000,000
                                                                                ------------     ------------
             Total long-term liabilities..................................       42,928,218      100,340,842
                                                                                ------------     ------------
     MINORITY INTERESTS IN CONSOLIDATED
        SUBSIDIARIES (Note 2).............................................        1,593,168          567,283
     COMMITMENTS AND CONTINGENCIES (NOTE 15)
        Class A Common Stock subject to put, $0.01 par                    
          value:101,124 shares authorized and outstanding.................               --        1,213,488
     SHAREHOLDERS' DEFICIT:
        Class A Common Stock, $.01 par value: 50,000,000 shares
          authorized; 2,980,953 and 4,202,006 shares issued and
          outstanding, respectively.......................................           29,810           42,020
        Class B Common Stock, $.01 par value: 1,785,120 shares
          authorized; 1,785,120 shares issued and
          outstanding, respectively.......................................           17,851           17,851
        Additional paid-in capital........................................        9,143,375       27,446,955
        Accumulated other comprehensive income............................               --            8,456
        Accumulated deficit...............................................      (27,397,481)     (38,847,951)
                                                                                ------------     ------------
        Total shareholders' deficit.......................................      (18,206,445)     (11,332,669)
                                                                                ------------     ------------
        Total liabilities and shareholders' deficit.......................      $41,358,128     $110,894,034
                                                                                ------------     ------------
                                                                                ------------     ------------
</TABLE>

     The accompanying notes to these consolidated financial statements are an
             integral part of these consolidated financial statements.

                                       36
<PAGE>


                 JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                               For the Years ended December 31,
                                                              ------------------------------------------------------------------
                                                                     1996                    1997                   1998
                                                              -------------------     -------------------     ------------------
<S>                                                           <C>                     <C>                     <C>
REVENUES:

   Radio programming...............................           $       6,978,303       $      10,199,870       $     10,041,070
   Radio representation............................                         --                      --               5,106,540 
   Television programming:
     Non-affiliated entities.......................                     193,204              10,863,512             15,795,632 
     Affiliated entities (Note 4)..................                     960,254               1,138,000              1,096,580 
                                                               ----------------        ----------------        ---------------
         Total television programming..............                   1,153,458              12,001,512             16,892,212
                                                               ----------------        ----------------        ---------------
   Satellite delivery and production support:
     Non-affiliated entities.......................                   3,120,000               2,600,000              1,578,079
     Affiliated entities (Note 4)..................                   5,402,680               4,309,818              4,593,620
                                                               ----------------        ----------------        ---------------
         Total satellite delivery and production
           support.................................                   8,522,680               6,909,818              6,171,699
                                                               ----------------        ----------------        ---------------
         Total revenues............................                  16,654,441              29,111,200             38,211,521
                                                               ----------------        ----------------        ---------------
OPERATING EXPENSES:

   Radio programming...............................                   4,162,634               5,816,250              7,778,061
   Radio representation............................                         --                      --               1,128,713
   Television programming:
     Non-affiliated entities.......................                   1,156,922               5,726,418              9,015,421
     Affiliated entities (Note 4)..................                         --                3,545,930              5,216,110
                                                               ----------------        ----------------        ---------------
         Total television programming..............                   1,156,922               9,272,348             14,231,531
   Satellite delivery and production support.......                   5,451,966               4,685,470              5,240,168
   Selling and marketing...........................                   1,737,566               2,916,648              4,868,700
   General and administrative......................                   3,269,623               4,168,005              6,727,604
                                                               ----------------        ----------------        ---------------
         Total operating expenses..................                  15,778,711              26,858,721             39,974,777
                                                               ----------------        ----------------        ---------------
OPERATING INCOME (LOSS)............................                     875,730               2,252,479             (1,763,256)
                                                               ----------------        ----------------        ---------------
OTHER (INCOME) EXPENSE:

   Interest expense (Note 4, 6 and 7)..............                   4,499,898               5,676,896              8,971,139
   Interest income.................................                     (72,151)               (107,843)              (775,735)
   Write-off of deferred offering costs (Note 2)...                         --                  938,000                     -- 
   Equity income (loss) of subsidiaries............                    (828,992)               (396,155)                57,322
   Other expense (income)..........................                     (11,660)                 73,972              1,171,264
                                                               ----------------        ----------------        ---------------
         Total other expense, net..................                   3,587,095               6,184,870              9,423,990
                                                               ----------------        ----------------        ---------------
LOSS BEFORE INCOME TAXES AND
   MINORITY INTERESTS..............................                  (2,711,365)             (3,932,391)           (11,187,246)
   Income tax provision (benefit) (Note 13)........                    (386,912)             (1,341,997)                48,531
                                                               ----------------        ----------------        ---------------
LOSS BEFORE MINORITY INTERESTS.....................                  (2,324,453)             (2,590,394)           (11,235,777)
                                                               ----------------        ----------------        ---------------
   Minority interests in net income (loss) of
     consolidated subsidiaries.....................                      (9,051)                902,781                214,693
                                                               ----------------        ----------------        ---------------
NET LOSS                                                      $      (2,315,402)      $      (3,493,175)      $    (11,450,470)
                                                               ----------------        ----------------        ---------------
                                                               ----------------        ----------------        ---------------
ADJUSTMENTS TO ARRIVE AT 
   COMPREHENSIVE LOSS..............................                          --                      --                  8,456

COMPREHENSIVE LOSS.................................           $      (2,315,402)      $      (3,493,175)      $    (11,442,014)
                                                               ----------------        ----------------        ---------------
                                                               ----------------        ----------------        ---------------
NET LOSS PER COMMON SHARE..........................           $           (0.56)      $           (0.79)      $          (2.13)
                                                               ----------------        ----------------        ---------------
                                                               ----------------        ----------------        ---------------
NET LOSS PER COMMON SHARE - assuming dilution......           $           (0.56)      $           (0.79)      $          (2.14)
                                                               ----------------        ----------------        ---------------
                                                               ----------------        ----------------        ---------------
WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING.....................................                   4,103,573               4,400,448              5,372,644
                                                               ----------------        ----------------        ---------------
                                                               ----------------        ----------------        ---------------
</TABLE>


       The accompanying notes to these consolidated financial statements are an 
               integral part of these consolidated financial statements.

                                       37
<PAGE>

                 JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                   COMMON STOCK          COMMON STOCK                               
                                                     CLASS A               CLASS B        ADDITIONAL                   TOTAL  
                                              ---------------------- -------------------   PAID-IN    ACCUMULATED   SHAREHOLDERS'
                                                SHARES       AMOUNT   SHARES     AMOUNT    CAPITAL      DEFICIT       DEFICIT
                                              ----------- ---------- --------- --------- ----------  ------------- --------------
<S>                                           <C>         <C>        <C>       <C>       <C>         <C>           <C>
Balance, December 31, 1995.................    1,385,120    $13,851  1,385,120   $13,851 $        --   $(20,387,790) $(20,360,088)
Issuance of common stock in exchange
  for Earth Segment........................      583,333      5,834         --        --          --         (5,834)           --
Advances to parent company (Note 2)........           --         --         --        --          --       (593,816)     (593,816)
Net loss...................................           --         --         --        --          --     (2,315,402)   (2,315,402)
                                              ----------- ---------- --------- ---------  ----------  ------------- --------------
Balance, December 31, 1996.................    1,968,453     19,685  1,385,120    13,851          --    (23,302,842)  (23,269,306)
Issuance of common stock in exchange 
  for Jones Space Segment, Inc. (Note 1)...      416,667      4,167         --        --          --         (4,167)           --
Advance to parent company (Note 2).........           --         --         --        --          --       (593,964)     (593,964)
Issuance of common stock in exchange
  for minority interests of Glenn R. Jones  
  (Note 1).................................      333,333      3,333         --        --          --         (3,333)           --
Issuance of common stock for the
  Product Information Network
  acquisition (Note 1).....................      262,500      2,625         --        --   3,147,375             --     3,150,000 
Conversion of the Jones Global Group
  note (Note 5)............................           --         --    400,000     4,000   5,996,000             --     6,000,000 
Net loss...................................           --         --         --        --          --     (3,493,175)   (3,493,175)
                                              ----------- ---------- --------- ---------  ----------  ------------- --------------
Balance, December 31, 1997.................    2,980,953     29,810  1,785,120    17,851   9,143,375    (27,397,481)  (18,206,445)
Conversion of Jones Global Group note......      666,667      6,667         --        --   9,993,333             --    10,000,000 
Issuance of common stock for
  the MediaAmerica, Inc, acquisition.......      541,970      5,419         --        --   8,124,131             --     8,129,550 
Issuance of common stock in
  exchange for the ownership
  interests in PIN Venture.................       12,416        124         --        --     186,116             --       186,240 
Other comprehensive income, net of tax:
  Unrealized gains on securities...........           --         --         --        --          --             --         8,456 
Net loss...................................           --         --         --        --          --    (11,450,470)  (11,450,470)
                                              ----------- ---------- --------- ---------  ----------  ------------- --------------
Balance, December 31, 1998.................    4,202,006    $42,020  1,785,120   $17,851 $27,446,955   $(38,847,951) $(11,332,669)
                                              ----------- ---------- --------- ---------  ----------  ------------- --------------
                                              ----------- ---------- --------- ---------  ----------  ------------- --------------
</TABLE>

     The accompanying notes to these consolidated financial statements are an
         integral part of these consolidated financial statements.

                                       38
<PAGE>

                 JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               For the Years ended December 31,
                                                               ------------------------------------------------------------------
                                                                      1996                    1997                   1998
                                                               -------------------     -------------------     ------------------
<S>                                                            <C>                     <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss........................................             $     (2,315,402)       $     (3,493,175)       $    (11,450,470)
   Adjustment to reconcile net loss to net cash
   provided by (used in) operating activities:
     Depreciation and amortization.................                    4,476,027               5,167,892               6,266,138
     Equity in (loss) income of subsidiaries.......                     (828,992)               (396,155)                 57,322
     Distributions received........................                      300,000                 100,000                 350,000
     Write-off of deferred offering costs..........                          --                  938,000                     -- 
     Minority interest in net (loss) income........                       (9,051)                902,781                 214,693
     Loss on sale of equipment.....................                          --                   81,209                   3,599
     Net change in assets and liabilities:
       Decrease (increase) in receivables..........                        5,317               1,168,733              (4,134,681)
       Increase in receivables from affiliates.....                     (361,809)               (538,949)               (238,777)
       Decrease (increase) in prepaid expenses.....
         and other current assets..................                     (495,717)                344,865                 157,807
       Decrease (increase) in deferred ............                     (104,204)                 43,880                  88,669
         commissions...............................
       Decrease (increase) in other assets.........                      (58,983)                 78,635                (271,171)
       Increase in accounts payable................                      223,393               1,192,730               1,357,787
       Increase in producers' fee payable..........                          --                      --                2,043,770
       Increase (decrease) in accounts payable                         3,668,270               2,861,899              (8,437,143)
         to Jones International....................
       Increase (decrease) in interest payable.....                      215,524                (161,905)              5,527,631
       Increase in deferred revenues...............                        5,500                   8,054                 738,709
       Increase in accrued liabilities and other                          52,872                 112,355                 233,806
         liabilities...............................
       Increase (decrease) in customer deposits....                        3,352                (821,378)                181,904
                                                               -------------------     -------------------     ------------------
     Net cash provided by (used in) operating activities               4,776,097               7,589,471              (7,310,407)
                                                               -------------------     -------------------     ------------------
   CASH FLOWS FROM INVESTING ACTIVITIES:

     Purchase of property, plant and equipment.....                   (2,969,379)             (1,367,026)             (2,257,832)
     Sale of property, plant and equipment.........                          --                  255,671                  56,890
     Subscriber incentive payments.................                          --                      --               (3,064,354)
     Purchases of intangible assets and programming                   (1,001,667)                (44,646)               (295,314)
     Purchase of MediaAmerica, Inc.................                          --                      --              (26,700,000)
     Purchase of investments.......................                          --                      --               (2,760,190)
                                                               -------------------     -------------------     ------------------
     Net cash used in investing activities.........                   (3,971,046)             (1,156,001)            (35,020,800)
                                                               -------------------     -------------------     ------------------
CASH FLOWS FORM FINANCING ACTIVITIES:

     Increase in deferred offering costs...........                     (607,505)               (505,239)             (4,301,684)
     Increase in capitalized loan fees.............                          --                  (50,000)                    -- 
     Repayment of borrowings.......................                       (7,991)                    --              (23,259,000)
     Repayment of capital lease obligations........                   (1,533,031)             (1,964,954)            (28,757,208)
     Proceeds from borrowings......................                    1,341,968                     --               16,704,500
     Proceeds from Senior Secured Notes............                          --                      --              100,000,000
     Distributions paid to minority interests......                          --                      --               (1,118,557)
     Acquisition of minority interests.............                          --                 (200,000)                    --
                                                               -------------------     -------------------     ------------------
     Net cash provided by (used in)
       financing activities........................                     (806,559)             (2,720,193)             59,268,051
                                                               -------------------     -------------------     ------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...                       (1,508)              3,713,277              16,936,844
                                                   
CASH AND CASH EQUIVALENTS, BEGINNING
   OF PERIOD.......................................                        5,400                   3,892               3,717,169
                                                               -------------------     -------------------     ------------------
CASH AND CASH EQUIVALENTS, END
   OF PERIOD.......................................             $          3,892        $      3,717,169        $     20,654,013
                                                               -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid......................................             $      4,499,898        $      5,838,801        $      3,443,508
                                                               -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
Goodwill...........................................                      300,000               3,036,923               5,372,644
                                                               -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
Issuance of Class A Common Stock for GAC equity agreement       $            --         $            --         $      1,213,488
                                                               -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
Issuance of Class A Common Stock for the acquisition of
MediaAmerica, Inc..................................             $            --         $            --         $      8,129,550
                                                               -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
Conversion of Global Group note to Class A                      $            --         $      6,000,000        $     10,000,000
   Common Stock....................................            -------------------     -------------------     ------------------
                                                               -------------------     -------------------     ------------------
</TABLE>

     The accompanying notes to these consolidated financial statements are an
         integral part of these consolidated financial statements.

                                       39
<PAGE>


               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

(1)  ORGANIZATION AND BUSINESS

     Jones International Networks, Ltd. (which is now known as JPN, Inc., 
"Old Company," effective May 1998) was incorporated in November 1993. The Old 
Company was temporarily a wholly-owned subsidiary of Jones Network Holdings 
LLC ("Network Holdings"), a Colorado limited liability company. Old Company 
had acquired certain subsidiaries from the parent of Network Holdings, Jones 
International, Ltd. ("Jones International"). Mr. Glenn R. Jones, Chairman and 
Chief Executive Officer of New Company, owns 100 percent of Jones 
International. The accompanying consolidated financial statements have been 
prepared on the basis of reorganization accounting of entities under common 
control (similar to pooling of interests) as though Old Company had made the 
acquisitions of these Jones International subsidiaries at their inception.

     In May 1998, a new company named Jones International Networks, Ltd. 
("New Company") was formed as a wholly-owned subsidiary of Network Holdings 
and a sister company of Old Company. Effective upon the closing in July 1998 
of an offering of 11 3/4% Senior Secured Notes ("Notes") by New Company (see 
Note 14) and the acquisition by New Company of MediaAmerica, Inc. 
("MediaAmerica) (see Note 14), New Company acquired all of the shares of Old 
Company from Network Holdings, and the members of Network Holdings exchanged 
their Class A Ownership Interests and Class B Ownership Interests in Network 
Holdings for shares of Class A Common Stock and Class B Common Stock, 
respectively, of New Company, and Network Holdings was dissolved. Old Company 
is now a wholly-owned subsidiary of New Company. The results of operations 
and financial condition of New Company ("the Company") reflect all of the 
operations of the Old Company.

     The Company creates, develops, acquires and produces programming that it 
distributes to radio stations, cable television system operators and other 
video distributors. The Company (i) provides radio programming to radio 
stations in exchange for advertising time that it resells to national 
advertisers, (ii) sells advertising time on nationally syndicated radio 
programs, (iii) provides television and music programming to cable television 
system operators and other video distributors, (iv) sells advertising time on 
its two television networks and (v) receives license fees for its country 
music television network.

     On April 1, 1997, the Company acquired Mr. Glenn R. Jones' 19 percent 
equity interest in Jones Infomercial Networks, Inc. ("Infomercial Networks"), 
the subsidiary through which the Company has invested in a majority interest 
in the Product Information Network Venture ("PIN Venture") and Mr. Jones' 19 
percent equity interest in the Great American Country, Inc. ("Great American 
Country"), the subsidiary through which the Company operates Great American 
Country, in exchange for 333,333 shares of the Company's Class A Common 
Stock. As a result of these transactions, Informercial Networks and Great 
American Country are wholly owned by the Company. Also on April 1, 1997, the 
Company acquired the satellite transponder leases and related subleases owned 
by Jones Space Segment, Inc. ("Space Segment"), an affiliate of the Company, 
in exchange for 416,667 shares of the Company's Class A Common Stock. These 
three transactions were accounted for as a reorganization of entities under 
common control. The accompanying consolidated financial statements have been 
prepared to include these

                                       40
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

acquisitions as though the Company had made them at their inception.

     The Company has received advances and loans from Jones International and 
related companies to fund its operating and investing activities. Jones 
International and such related companies are under no obligation to provide 
additional advances or loans to the Company.

     VENTURES--The Company is a partner in two joint ventures, the PIN 
Venture and Galactic/Tempo ("Superaudio"), and is a member in a third 
venture, Jones/Capstar Programming, LLC ("Jones/Capstar"). The PIN Venture 
commenced operations on February 1, 1995 and is a joint venture which is 
owned approximately 55 percent by the Company and 45 percent by a third party 
(see Note 3). The PIN Venture owns and operates a 24-hour-a-day cable 
television network for the airing of long-form advertising ("infomercials"). 
Superaudio commenced operations in July 1990 and is a joint venture which is 
owned 50 percent by the Company and 50 percent by a third party. Superaudio 
is in the business of providing audio programming services to cable 
television system operators. Jones/Capstar commenced operations in July 1998 
and is a limited liability company which is owned 50 percent by the Company 
and 50 percent by a third party. Jones/Capstar is in the business of 
developing, producing and distributing a syndicated radio program known as 
"Nashville Nights." Profits, losses and distributions of these ventures have 
been and will be allocated in accordance with the respective ownership 
interests of the partners or members. Distributions of assets have been and 
will be approved by the partners or members for the respective venture prior 
to such distributions.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     CASH AND CASH EQUIVALENTS--The Company considers all highly liquid 
investments with a maturity when purchased of three months or less to be cash 
equivalents.

     RESTRICTED CASH--$10.0 million of the proceeds from the Notes (see Note 
14) was deposited into a Reserve Account. Cash balances in the Reserve 
Account are restricted to use for acquisitions and payment of principal or 
interest on the Notes. In January 1999, $5.6 million of these funds were used 
to pay the January 1, 1999 interest payment on the Notes.

     AVAILABLE FOR SALE SECURITIES--Available for sale marketable securities 
are carried at fair value, with unrealized holding gains and losses carried 
as a separate component of shareholders' deficit. The cost of securities sold 
is determined using the first-in, first-out method. At December 31, 1998, the 
Company held marketable securities available for sale with an aggregate cost 
of $2,760,190 and a net unrealized gain of $8,456.

     FAIR VALUE OF FINANCIAL INSTRUMENTS--The fair value of the Company's 
financial instruments is estimated based on the quoted market prices for 
similar instruments. The carrying value of the Company's accounts receivable 
and cash accounts are assumed to approximate fair value due to the short-term 
nature of these accounts.

     PRINCIPLES OF CONSOLIDATION--The consolidated financial statements 
include the accounts of all majority-owned and controlled subsidiaries. 
Investments in entities which are not majority-owned and controlled by the 
Company are accounted for under the equity method. All significant 
intercompany balances and transactions have been eliminated in consolidation.

                                       41

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     MINORITY INTEREST--The minority interest in the net income or loss of 
the Company's consolidated subsidiaries is reflected in the statements of 
operations. To the extent the minority interest in the net losses of the 
Company's consolidated subsidiaries exceeds the minority investment in those 
subsidiaries, such excess losses are charged to the Company. No such excess 
losses were incurred in 1997 and 1998.

     PROPERTY, PLANT AND EQUIPMENT--Property and equipment are depreciated 
using the straight-line method over the estimated useful lives of 3 to 15 
years. The building is depreciated using the straight-line method over an 
estimated useful life of 40 years. Leasehold improvements are depreciated 
using the straight-line method over the lesser of five years or the term of 
the lease. Satellite transponders are depreciated using the straight-line 
method over the estimated useful life of 12 years.

     GOODWILL--Goodwill consists primarily of the excess purchase price paid 
in the PIN Venture acquisition in 1997 (see Note 3) and the excess purchase 
price paid in the MediaAmerica acquisition in 1998 (see Note 3). Goodwill 
related to the PIN Venture acquisition is amortized using the straight-line 
method over the estimated economic life of the partnership, which is 18 
years. Goodwill related to the MediaAmerica acquisition is amortized using 
the straight-line method over an estimated economic life of 40 years.

     OTHER INTANGIBLE ASSETS--Intangible assets consist primarily of radio 
programming licensing agreements obtained from a third party in October 1996 
and subscriber incentive payments. Intangible assets are amortized using the 
straight-line method over the lesser of 15 years or the term of the affiliate 
agreement.

     LONG-LIVED ASSETS--The Company reviews for the impairment of long-lived 
assets and certain identifiable intangibles whenever events or changes in 
circumstances indicate that the carrying amount of an asset may not be 
recoverable. No such impairment indicators have been identified by the 
Company for the years ended December 31, 1997 and 1998.

     ADVANCES TO PARENT COMPANY--Advances to parent company in the statements 
of shareholders' deficit represent the net impact of the intercompany 
activity between Space Segment and Jones International. Such amounts have 
been presented as further reductions of accumulated deficit in connection 
with the reorganization of these entities under common control during 1997.

     DEFERRED COMMISSIONS--Sales commissions are amortized using the 
straight-line method over the life of the corresponding affiliate agreements 
from which the sales commission was paid. The current amount represents the 
portion to be amortized within the next 12 months.

      DEBT OFFERING COSTS--The Company incurred approximately $4,526,000 of 
debt offering costs in the year ended December 31, 1998. Such costs include 
fees for financial advisory services, legal counsel, independent public 
accountants, regulatory and stock exchange registration fees, and other 
various costs associated with the Notes offering. In 1997, the Company 
incurred $505,000 of deferred offering costs related to a proposed equity 
offering. As a result of the withdrawal of the proposed offering in early 
1997, the portion of the deferred offering costs that were deemed by 
management as unusable in pursuing other financing options were expensed. 
During the year ended December 31, 1997, $938,000 of such costs was expensed 
by the Company. The remaining deferred offering costs of approximately 
$175,000 are included in debt offering costs in the accompanying consolidated 
statements of financial position at December 31, 1997 and are deemed to 
benefit the Notes Offering completed by the Company which closed in July 1998 
(see Note 14).

                                       42

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     CUSTOMER DEPOSITS AND DEFERRED REVENUES--Customer deposits consist of 
unearned revenues associated with affiliate fees and refundable advance 
payments. Deferred revenues consist of advance payments and a security 
deposit paid by a lessee of the Company's satellite transponder.

     INCOME TAXES--Prior to April 2, 1997, the Company joined with Jones 
International in filing a consolidated tax return as provided for under the 
terms of a tax allocation agreement with Jones International and certain of 
Jones International's subsidiaries. Pursuant to the terms of the tax 
allocation agreement, tax provisions (benefits) were allocated to the members 
of the tax sharing group based on their respective pro rata contribution of 
taxable income (loss) to Jones International's consolidated taxable income 
(loss). As a result of the issuance of additional shares of the Company's 
common stock (see Note 1), less than 80 percent of the Company's outstanding 
common stock was beneficially (or indirectly) owned by Jones International as 
of April 2, 1997. Therefore, the Company is no longer included in the Jones 
International tax allocation agreement.

     The tax allocation agreement with Jones International gave Jones 
International the option to either make a payment of the tax benefits due to 
the subsidiary members of the tax sharing group or to defer such payments 
until a subsequent taxable period in which the subsidiary member generated 
taxable income and had a tax payment due either to Jones International or to 
a federal or state taxing authority. Jones International could defer such 
payments for a period not to exceed five years from the date the tax return 
was filed and could accrue interest at the time the deferred benefit amounts 
originated. For the year ended December 31, 1997, Jones International elected 
to defer a tax benefit of approximately $1,342,000 due to the Company and its 
subsidiaries. For the year ended December 31, 1998, the Company recorded a 
tax provision of approximately $49,000 to adjust estimated tax provisions to 
actual tax provisions for the year ended December 31, 1997. This provision 
was offset against the income tax benefit receivable from Jones International.

     The Company accounts for deferred tax liabilities or assets based on the 
temporary differences between the financial reporting and tax bases of assets 
and liabilities as measured by the enacted tax rates which are expected to be 
in effect when these differences reverse. Deferred tax assets are reduced, if 
deemed necessary, by a valuation allowance for the amount of any tax benefits 
which, based upon current circumstances, are not expected to be realized.

     REVENUE RECOGNITION--The Company's revenues consist of radio programming 
revenues, radio representation revenues, television programming revenues and 
satellite delivery and production support revenues.

     Radio programming revenues include advertising and license fees. The 
Company generates radio advertising revenues by selling airtime to 
advertisers who advertise their products or services on the networks. The 
Company recognizes advertising revenues upon airing of the advertisements. 
Any amounts received from customers for radio advertisements that have not 
been aired during the period are recorded as deferred revenues until such 
time as the advertisement is aired. The Company delivers its programming to 
radio stations for distribution to their listeners. Radio station license 
fees are earned monthly from certain stations based on the radio station's 
contractual agreement.

     Radio representation revenues include revenues from the selling of 
advertising time on radio programs. The Company recognizes radio 
representation revenues upon airing of the advertisements.

                                       43

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     Television programming revenues include advertising and license fees. 
The Company generates television advertising revenues by selling airtime to 
advertisers who advertise their products or services on the networks. The 
Company recognizes advertising revenues upon the airing of the 
advertisements. Any amounts received from customers for television 
advertisements that have not been aired during the period are recorded as 
deferred revenues until such time as the advertisement is aired. The Company 
delivers its programming to cable television systems for distribution to 
their viewers. Cable television system license fees are earned monthly based 
on a per subscriber fee set under the terms of the cable operator's 
contractual agreement and the number of subscribers that are receiving the 
Company's programming during the respective month.

     Satellite delivery and production support revenues include revenues from 
satellite delivery, uplinking, trafficking, playback and other services. The 
Company generates revenues by providing such services to affiliates and third 
parties. The Company recognizes satellite delivery and production support 
revenues upon completion of the services or upon contractual arrangements.

     NEW ACCOUNTING PRONOUNCEMENTS--In June 1998, the Financial Accounting 
Standards Board ("FASB") issued Statement of Financial Accounting Standards 
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging 
Activities," which is effective for the year ending December 31, 1999. This 
statement establishes accounting and reporting standards for derivative 
instruments, including certain derivative instruments embedded in other 
contracts (collectively referred to as derivatives), and for hedging 
activities. It requires that an entity recognize all derivatives as either 
assets or liabilities in the statement of financial position and measure 
those instruments at fair value. If certain conditions are met, a derivative 
may be specifically designated as (a) a hedge of the exposure to changes in 
the fair value of a recognized asset or liability or an unrecognized firm 
commitment, (b) a hedge of the exposure to variable cash flows of a 
forecasted transaction or (c) a hedge of the foreign currency exposure of a 
net investment in a foreign operation, an unrecognized firm commitment, an 
available-for-sale security, or a foreign-currency-denominated forecasted 
transaction. The Company will adopt this statement in 1999. Management of the 
Company does not expect that the adoption of this statement will have a 
material impact on the Company's financial statements.

     USE OF ESTIMATES--The preparation of financial statements in conformity 
with generally accepted accounting principles requires the Company to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and expenses 
during the reporting period. Actual results could differ from those estimates.

     IMPACT OF THE YEAR 2000 ISSUE (UNAUDITED)--The Year 2000 issue is the 
result of many computer programs being written such that they will 
malfunction when reading a year of "00." This problem could cause system 
failure or miscalculations causing disruptions of business processes.

      The Company initiated an assessment of how the Year 2000 problem could 
affect its operations in the summer of 1997 and, in conjunction with related 
parties, established a Year 2000 Program Office (the "Y2K Office") to manage 
the process. The Y2K Office meets periodically with the Company's management 
to inform them of its assessment activities, the Year 2000 priorities it has 
identified, remediation recommendations and testing and compliance issues. In 
addition, the Y2K Office organizes and meets regularly with a review 
committee comprised of representatives from various departments within the 
Company to ensure that management from the affected areas participate in the 
decision process.

                                       44

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


      The Y2K Office is currently implementing the steps needed to address 
the Year 2000 problem based upon its set priorities and is testing the 
implemented solutions. The Y2K Office's schedule for implementing and testing 
its Year 2000 solutions for systems that have been determined to be first 
priority for the Company is as follows:

<TABLE>
<CAPTION>
                                                                                                        EXPECTED

PROJECT                                                        DESCRIPTION                   COMPLETION DATE
-------                                                        -----------                   ---------------
<S>                                                    <C>                                   <C>
Financial Information Management System..............  Test for Y2K compliance                       1Q99

Human Resources Information System...................  Test for Y2K compliance                       2Q99

Unix Hardware and Software...........................  Upgrade to Y2K compliant
                                                          releases and test for compliance           1Q99

Local Area Network ("LAN") and Wide Area               Determine which components are
   Network ("WAN") Components........................     not Y2K compliant                          1Q99

LAN/WAN Hardware and Software........................  Upgrade to Y2K compliant
                                                          releases and test for compliance           2Q99

Telephony Systems....................................  Upgrade to Y2K compliant
                                                          releases and test for compliance           1Q99

GAC and PIN Network Traffic and Billing System.......  Y2K certification testing                     1Q99

Uplink and Broadcast Center..........................  Y2K certification testing                     2Q99

</TABLE>

     In 1999, the Y2K Office will also focus on Year 2000 compliance issues 
with respect to other systems, such as desktop hardware and software, data 
archiving systems, traffic and billing reconciliation applications and other 
record management systems. The Company has not used, and does not plan to 
employ, unaffiliated third party verification and validation processes to 
assure the reliability of its risk and cost estimates. The Company has not 
deferred any other significant information technology projects due to Year 
2000 efforts.

     The Y2K Office commenced contacting vendors of application and operation 
system software in 1997 and continues to work with vendors through industry 
groups focused on Year 2000 issues. The Company has not yet determined the 
extent to which it is vulnerable to the failure by vendors and customers that 
have a material relationship with the Company to remediate Year 2000 
compliance issues. Management believes, but makes no assurance, that the 
Company does not supply to third parties systems or equipment that may cause 
a Year 2000 problem.

     The Company has not incurred any material Year 2000 costs to date. 
Management does not have an estimate for future Year 2000 project costs that 
may be incurred. Management expects, but makes no assurance that, future Year 
2000 project costs will not have a material adverse effect on its financial 
condition and results of operations.

      The Company has not yet formulated contingency plans in the event that 
systems are not Year 2000 compliant. The Company recognizes the need for a 
contingency plan and plans to develop one by the second quarter of 1999. 
There can be no assurance that the Company's systems will be Year 2000 
compliant in time. The Year 2000 issue poses many risks for the Company and 
could materially adversely affect its financial condition and results of 
operations.

(3)  ACQUISITIONS OF PIN VENTURE AND MEDIAAMERICA

                                       45

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     From February 1995 until March 31, 1997, the Company owned 50 percent or 
less of the PIN Venture. Effective April 1, 1997, the Company acquired from 
Adelphia Communications Corporation an 8.35 percent equity interest in the 
PIN Venture in exchange for 262,500 shares of the Company's Class A Common 
Stock. Effective December 31, 1998, the Company acquired the remaining 
Adelphia Communications Corporation equity interest in the PIN Venture, 2.18 
percent, in exchange for 12,416 shares of the Company's Class A Common Stock. 
As a result of these transactions, which were accounted for as purchases, the 
Company now owns approximately 55.3 percent of the PIN Venture. The Company 
recorded goodwill of $13.2 million in conjunction with the acquisitions of 
the additional interests. Effective April 1, 1997, the Company consolidated 
the results of operations of the PIN Venture for financial reporting purposes.

     On July 10, 1998, the Company acquired substantially all assets and 
assumed certain liabilities of MediaAmerica for $32.7 million plus a working 
capital adjustment of approximately $2.1 million. MediaAmerica provides radio 
advertising sales representation services and also owns syndicated radio 
programming. The seller of MediaAmerica received $26.7 million in cash and 
$6.0 million in shares of Class A Common Stock of the Company valued at $15 
per share. The seller of MediaAmerica also received 141,970 shares of Class A 
Common Stock for the working capital adjustment. In addition, the seller of 
MediaAmerica may receive up to $5 million in shares of Class A Common Stock, 
with the excess, if any, to be paid in cash if certain multiples of earnings 
before interest, taxes, depreciation and amortization ("EBITDA") for the 
twelve-month period following the closing are achieved. The acquisition was 
accounted for as a purchase. The Company recorded approximately $29.8 million 
in goodwill in connection with the acquisition of MediaAmerica.

      The seller of MediaAmerica have the right to cause the Company to 
repurchase the shares of the Company issued in the MediaAmerica acquisition 
at any time after three years from the July 10, 1998 closing. The price would 
be the fair market value of the Class A Common Stock on the date of exercise 
of the put, as determined by agreement or by an independent investment 
banking firm. The Company has a correlative right to require that the seller 
of MediaAmerica to sell such shares to the Company at fair market value. Such 
rights terminate upon an initial public offering by the Company. Before the 
seller of MediaAmerica can require the Company to buy its shares, the Company 
must have available cash (as defined); this condition lapses after seven and 
one quarter years from the date of closing. If the Company has exercised its 
purchase right and there is a change of control involving a higher price 
within nine months of the exercise of the call, the Company must pay 
specified additional consideration.

     Certain unaudited condensed pro-forma financial information of the 
Company assuming the purchases noted above were completed as of January 1, 
1997, is as follows:

<TABLE>
<CAPTION>

                                               DECEMBER 31,
                                               ------------
                                           1997             1998
                                          -----             ----
<S>                                    <C>             <C>
Revenues..........................     47,295,000        44,564,000
Operating expenses................     40,136,000        46,131,000
Operating income (loss)...........      7,159,000        (1,567,000)
Net loss..........................     (4,841,000)      (14,393,000)
Net loss per common share.........        $ (1.01)           $(2.40)

</TABLE>

(4)  TRANSACTIONS WITH AFFILIATED ENTITIES

                                       46

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     The Company is a subsidiary of Jones International, a holding company 
with ownership in several companies involved in various aspects of the 
telecommunications industry. Jones International is wholly owned by Mr. 
Jones, Chairman and Chief Executive Officer of Jones Intercable and various 
other subsidiaries of Jones International. Certain members of management of 
the Company are also officers or directors of these affiliated entities and, 
from time to time, the Company may have transactions with these entities. 
Certain expenses are paid by affiliated entities on behalf of the Company and 
are allocated at cost based on specific identification or other methods which 
management believes are reasonable. Recurring transactions with affiliates, 
excluding Superaudio, are described below. See Note 8 for transactions with 
affiliates related to Superaudio.

      TELEVISION PROGRAMMING REVENUES--The Company earns up to a three 
percent commission on the sale of airtime for informational programming on 
Jones Education Company ("Jones Education") and its affiliates. For the year 
ended December 31, 1996, 1997 and 1998, the Company received approximately 
$241,000, $216,000 and $176,000, respectively, for this service.

     The Company distributes Great American Country to certain cable 
television systems owned or managed by Jones Intercable. Jones Intercable and 
its affiliated partnerships paid total license fees to the Company of 
approximately $719,000, $853,000 and $921,000 for the years ended December 
31, 1996, 1997 and 1998.

     SATELLITE DELIVERY AND PRODUCTION SUPPORT REVENUES--Jones Earth Segment, 
Inc. ("Earth Segment"), a wholly-owned subsidiary of the Company, provides 
playback, editing, duplication and uplinking services primarily to its cable 
programming network affiliates. Earth Segment charges affiliates for its 
services using rates which are calculated to achieve a specified rate of 
return on investment to Earth Segment. For the years ended December 31, 1996, 
1997 and 1998, Earth Segment charged Jones Education and its affiliates 
approximately $2,248,000, $2,193,000 and $2,664,000, respectively, for these 
services.

     Prior to the consolidation of the PIN Venture, Earth Segment charged the 
PIN Venture approximately $726,000 and $201,000 for the years ended December 
31, 1996 and 1997, respectively, for these services.

     In addition, Jones Space Holdings ("Space Holdings"), a subsidiary of 
the Company, subleases a non-preemptible satellite transponder to Jones 
Education and its affiliates. Satellite transponder lease revenues of 
approximately $852,000, $896,000 and $1,174,000, were received from Jones 
Education for the years ended December 31, 1996, 1997, and 1998, respectively.

     Prior to the consolidation of the PIN Venture, satellite transponder 
lease revenues of approximately $852,000, and $224,000 were received from the 
PIN Venture, for the years ended December 31, 1996 and 1997, respectively.

      TELEVISION PROGRAMMING EXPENSE--The PIN Venture pays a significant 
portion of the revenues generated by its infomercial programming in the form 
of system rebates to all cable systems which enter into agreements to air 
such programming. Amounts paid by the PIN Venture to Jones Intercable and its 
affiliated partnerships, Cox Communications and Adelphia Communications were 
approximately $3,546,000 for the nine months ended December 31, 1997. Amounts 
paid by the PIN Venture to Jones Intercable and its affiliated partnerships, 
Cox and Adelphia were approximately $5,216,000 for the year ended 
December 31, 1998.

                                       47

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     Jones Network Sales, a wholly-owned subsidiary of International, began 
providing affiliate sales services to the Company in late 1997. This 
affiliate charged the Company approximately $201,000 and $906,000 for the 
years ended December 31, 1997 and 1998, respectively, for these services.

     SATELLITE DELIVERY AND PRODUCTION SUPPORT EXPENSE--Jones Galactic Radio, 
Inc. ("Galactic Radio"), a wholly-owned subsidiary of the Company, has a 
transponder lease agreement with Jones Satellite Holdings ("Satellite 
Holdings"), an affiliate of the Company, for the use of the sub-carriers on a 
non-preemptible satellite transponder. This agreement allows Galactic Radio 
to use a portion of the transponder to distribute its audio programming. 
Satellite Holdings has the right to terminate the lease agreement at any time 
upon 30 days written notice to Galactic Radio. The Company agreed to pay 
Satellite Holdings approximately $58,000 per month. This agreement will 
expire May 7, 2004. Satellite Holdings charged approximately $696,000 for 
each of the years ended December 31, 1996, 1997 and 1998, for this service.

     GENERAL AND ADMINISTRATIVE EXPENSES--The Company leases and subleases 
office space in Englewood, Colorado from affiliates of Jones International. 
The Company was charged approximately $32,000, $88,000 and $148,000, for the 
years ended December 31, 1996, 1997 and 1998, respectively, for rent and 
associated expenses.

     An affiliate of Jones International provides computer hardware and 
software support services to the Company. This affiliate charged the Company 
approximately $385,000, $574,000 and $733,000, for the years ended December 
31, 1996, 1997 and 1998, respectively, for such services.

     An affiliate of the Company charged the Company approximately $197,000 
for the year ended December 31,1998 for the allocated costs of its airplane 
which was used by the Company in connection with the Notes offering.

     The Company and its consolidated subsidiaries reimburse Jones 
International and its affiliates for certain allocated administrative 
expenses. These expenses generally consist of payroll and related benefits. 
Allocations of personnel costs are generally based on actual time spent by 
affiliated associates with respect to the Company. Jones International and 
its affiliates charged the Company approximately $861,000, $540,000 and 
$1,116,000, for the years ended December 31, 1996, 1997 and 1998, 
respectively, for these administrative expenses.

      To assist in funding its operating and investing activities, the 
Company has borrowed funds from Jones International. Jones International 
charged interest on its advances to the Company at rates of approximately 10 
percent per annum in 1996, 1997 and 1998. Jones International's interest rate 
is calculated using the published prime rate plus two percent. Jones 
International charged the Company interest of approximately $243,000, 
$868,000 and $506,000, for the years ended December 31, 1996, 1997 and 1998, 
respectively. The Company repaid these advances from borrowings, operating 
cash flow and/or available cash balances.

(5)  LONG-TERM DEBT - AFFILIATED ENTITIES

     In December 1994, Earth Segment issued a promissory note which was 
acquired by Jones Intercable. As of December 31, 1996 and 1997, the principal 
amount of the note was approximately $6,555,000. The note was secured by all 
of Earth Segment's present and future tangible and intangible property. 
Interest expense, which was payable quarterly, totaled approximately 
$608,000, $627,000 and $156,000 for the years ended 

                                       48

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


December 31, 1996, 1997 and 1998, respectively. This note and accrued 
interest were repaid on March 31, 1998 (see Note 14).

      Effective August 15, 1996, the Company purchased all of the outstanding 
common stock of Galactic Radio from Jones Global Group, Inc. ("Global 
Group"), an affiliate of the Company, for $17.2 million. The Company paid the 
purchase price to Global Group using $1.2 million in cash, which was advanced 
to the Company by Jones International, with the balance paid in the form of a 
$16.0 million note to Global Group. Effective September 30, 1997, the Company 
and Global Group agreed to convert $6 million of the $16 million note payable 
to Global Group into 400,000 shares of the Company's Class B Common Stock.

      Effective upon the closing of the Notes offering, the remaining $10 
million of the Global Group note was converted into 666,667 shares of the 
Company's Class A Common Stock at a rate of $15 per share.

(6)  SENIOR SECURED NOTES

     In July 1998, the Company issued $100 million of 11 3/4 percent Senior 
Secured Notes (the "Notes"). The Company used the proceeds from the Notes 
offering (i) to finance the cash consideration of the acquisition of 
MediaAmerica, (ii) to prepay the capital lease obligation relating to the 
satellite transponders, (iii) to repay the Radio Holdings LLC credit facility 
and (iv) for general corporate purposes, including the payment of fees and 
expenses.

     Interest on the Notes is payable semi-annually on January 1 and July 1 
of each year, commencing January 1, 1999. The Notes will mature on July 1, 
2005. Except as described below, the Company may not redeem the Notes prior 
to July 1, 2003. On or after such date, the Company may redeem the Notes, in 
whole or in part, at any time, at a redemption price of 105.875 percent of 
the principal amount to be redeemed for the 12 month period commencing July 
1, 2003 and declining to 100 percent of the principal amount to be redeemed 
for the period after July 1, 2004, together with accrued and unpaid interest, 
if any, to the date of redemption. In addition, at any time and from time to 
time on or prior to July 1, 2001, the Company may, subject to certain 
requirements, redeem up to 35 percent of the aggregate principal amount of 
the Notes with the cash proceeds of one or more Equity Offerings (as defined) 
at a redemption price equal to 111.75 percent of the principal amount to be 
redeemed, together with accrued and unpaid interest, if any, to the date of 
redemption, provided that at least 65 percent of the aggregate principal 
amount of the Notes remains outstanding immediately after each such 
redemption. Upon the occurrence of a Change of Control (as defined), the 
Company will be required to make an offer to repurchase the Notes at a price 
equal to 101 percent of the principal amount thereof, together with accrued 
and unpaid interest, if any, to the date of repurchase.

     The Notes are senior obligations of the Company. The Notes are secured 
by the capital stock of JPN, Inc., the Company's wholly-owned intermediate 
holding company and JPN's direct subsidiaries. The Notes are unconditionally 
guaranteed (the "Guarantees") by each of the Subsidiary Guarantors. The 
Guarantees are senior obligations of the Subsidiary Guarantors and rank pari 
passu in right of payment with all existing and future Senior Indebtedness of 
the Subsidiary Guarantors, other than Bank Indebtedness (as defined) and 
Capitalized Lease Obligations (as defined) of the Subsidiary Guarantors, and 
are ranked senior in right of payment to all existing and future Subordinated 
Obligations of the Subsidiary Guarantors. The Guarantees are not secured.

      Mr. Jones has purchased Notes from third parties with a face value of  
$10,650,000 as of February 11, 1999.

                                       49

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


(7)  CAPITAL LEASES

     The capital lease obligation was comprised of a satellite transponder 
lease agreement which provided two non-preemptible satellite transponders. A 
portion of these satellite transponders are subleased to affiliated entities 
and third parties. On July 24, 1998, the Company prepaid the entire capital 
lease obligation using a portion of the proceeds from the Notes offering (see 
Note 14).

(8)  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate the fair 
value of each class of financial instruments for which it is practicable to 
estimate that value:

      LONG-TERM DEBT - The fair value of the Company's long-term debt is 
estimated based on an estimate of fair value for debt of similar 
characteristics.

      SENIOR SECURED NOTES - The fair value of the Notes were estimated based 
on the quoted market prices for the Notes.

      CLASS A COMMON STOCK SUBJECT TO PUT - The fair value of the Company's 
Class A Common Stock subject to put is estimated based on the estimated 
purchase price to buy back the Class A Common Stock (see Note 15).

The estimated fair values of the Company's financial instruments are as 
follows:

<TABLE>
<CAPTION>
                                                                    December 31,
                                               ---------------------------------------------------------
                                                          1997                           1998
                                               --------------------------    ---------------------------
                                                 Carry           Fair          Carry           Fair
                                                 Amount          Value         Amount          Value
                                               -----------    -----------    ------------    -----------
<S>                                            <C>            <C>            <C>             <C>
Long-term debt.............................    $16,555,000    $16,555,000    $         --    $        --
Senior secured notes.......................             --             --     100,000,000     64,000,000
Class A Common Stock subject to put........             --             --       1,213,000      1,020,000

</TABLE>

(9)  JOINT VENTURE

     The Company is a 50 percent partner in the Superaudio joint venture. 
Superaudio provides audio programming services to cable television system 
operators.

     Certain condensed financial information for Superaudio is as follows:

<TABLE>
<CAPTION>
                                                      DECEMBER 31,
                                       -------------------------------------------
                                          1996            1997            1998
                                       ----------      ----------       ----------
<S>                                    <C>             <C>              <C>
Total assets.....................      $  950,000      $1,216,000       $  770,000
Total liabilities................          72,000          62,000           64,000
Partners' capital................         878,000       1,154,000          706,000
Revenues.........................       2,379,000       2,132,000        1,789,000
Operating expenses...............       1,755,000       1,684,000        1,552,000
Operating income.................         624,000         448,000          237,000
Net income.......................         632,000         476,000          251,000

</TABLE>

                                       50

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


     Superaudio reimburses the Company and its affiliates for certain 
allocated overhead and administrative expenses. These expenses generally 
consist of payroll and related benefits, rent, computer hardware and software 
support services and other corporate facilities costs. The Company and its 
affiliates provide programming, advertising sales management, engineering, 
marketing, administrative, accounting, information management, and legal 
services to Superaudio. Allocations of personnel costs have been based 
primarily on actual time spent by the Company and its affiliates' employees.

     Significant transactions for Superaudio with affiliated entities are 
described below:

     AUDIO PROGRAMMING REVENUES--Superaudio delivers its audio programming to 
cable television systems owned by Jones Intercable and its affiliated 
partnerships for a monthly fee of $60,000. For each of the years ended 
December 31, 1996, 1997 and 1998, Jones Intercable and its affiliates paid 
Superaudio $720,000 for audio programming.

     AUDIO PROGRAMMING EXPENSE--The Company sells certain audio programming 
and services to Superaudio. For the years ended December 31, 1996, 1997 and 
1998, the Company charged Superaudio approximately $48,000, $16,000 and 
$36,000, respectively, for audio programming and services.

     In 1998, the Company began providing programming personnel to 
Superaudio. The Company charged Superaudio approximately $276,000 for audio 
programming and engineering personnel services for the year ended December 
31, 1998.

     SATELLITE DELIVERY AND PRODUCTION SUPPORT EXPENSE--The Company has a 
satellite transponder lease agreement with Satellite Holdings and in turn 
subleases the audio subcarriers on this satellite transponder to Superaudio. 
The Company charged Superaudio $633,000 for each of the three years ended 
December 31, 1998 for this service.

     Earth Segment provides playback, editing, duplication and uplinking 
services to Superaudio. Earth Segment charges Superaudio for its services 
using rates which are calculated to achieve a specified rate of return on 
investment to Earth Segment. For the years ended December 31, 1996, 1997 and 
1998, Earth Segment charged Superaudio approximately $97,000, $128,000 and 
$118,000, respectively, for these services.

     GENERAL AND ADMINISTRATIVE EXPENSES--An affiliate of Jones International 
provides computer hardware and software support services to Superaudio. The 
affiliate charged Superaudio approximately $40,000, $23,000 and $26,000 for 
the years ended December 31, 1996, 1997 and 1998, respectively, for computer 
services.

     Superaudio reimburses Jones International for certain allocated 
administrative expenses. These expenses generally consist of salaries and 
related benefits. Allocations of personnel costs are generally based on 
actual time spent by affiliated associates with respect to Superaudio. Jones 
International and its affiliates charged Superaudio approximately $23,000, 
$33,000 and $88,000 for the years ended December 31, 1996, 1997 and 1998, 
respectively, for these administrative expenses.

(10) COMMON STOCK

     VOTING RIGHTS--Holders of Class A Common Stock are generally entitled to 
one vote per share and are entitled to elect 25% of the Board of Directors, 
and holders of Class B Common Stock are entitled to ten 

                                       51

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


votes per share and to elect the remaining 75% of the Board of Directors. 
Both classes vote together as a single class on all matters not requiring a 
class vote under Colorado law.

(11) STOCK OPTIONS

     The Company has adopted an employee stock option plan (the "Plan") that 
provides for the grant of stock options and stock appreciation rights 
("SARs") to employees of the Company. The Plan is construed, interpreted and 
administered by the Board of Directors or a committee of two of more 
non-employee directors. The committee or the Board of Directors determines 
the individuals to whom options are granted, the number of shares subject to 
the options, the exercise price of the options, the period over which the 
options become exercisable and the terms and provisions of stock options as 
it may determine from time to time, subject only to the provisions of the 
Plan. The Plan covers an aggregate of up to 400,000 shares of the Company's 
Class A Common Stock. As of December 31, 1998, options to purchase 345,000 
shares of Class A Common Stock have been granted and 29,000 shares have been 
terminated or forfeited upon resignation of the holders. The options 
outstanding at December 31, 1998 have an exercise price of $15 per share and 
a weighted average remaining contractual life of 9.59 years. At December 31, 
1998, none of the options were exercisable.

     The Company accounts for this plan under Accounting Principles Board 
("APB") Opinion No. 25, under which no compensation has been recognized. Had 
compensation cost for this plan been determined consistent with SFAS No. 123, 
"Accounting for Stock-Based Compensation," the Company's net loss and basic 
and diluted earnings per share would have been approximately $11,279,000, 
$2.16 and $2.19, respectively. The fair value of each of the option granted 
is estimated on the date of grant using the Black-Scholes option pricing 
model with the following weighted-average assumptions used for grants in 
1998: risk-free interest rates of 5.5 percent and an expected life of 7 
years. Expected volatility is negligible due to the lack of public trading of 
Company's Common Stock.

(12) NET LOSS PER COMMON SHARE

     In February 1997, FASB issued SFAS 128, "Earnings Per Share." This 
statement replaced the calculation of primary and fully diluted earnings per 
share with basic and diluted earnings per share. Unlike primary earnings per 
share, basic earnings per share excludes any dilutive effects of options, 
warrants and convertible securities. Diluted earnings per share is similar to 
the previously reported fully diluted earnings per share.

                                       52

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Earnings per share amounts for all periods are presented below in accordance 
with the requirements of SFAS 128.

<TABLE>
<CAPTION>
                                              Years Ended December 31,
                                                1997             1998
                                            -----------     --------------
<S>                                         <C>             <C>
Numerator:
     Net loss...........................    $ 3,493,000     $ 11,450,000 
Denominator:
     Denominator for basic loss per
     share - weighted-average shares 
     outstanding........................      4,440,448        5,372,644 
Basic loss per share....................    $     (0.79)     $     (2.13)
Denominator:
     Denominator for diluted loss per
     share-weighted-average shares 
     outstanding........................      4,440,448        5,361,608 
Diluted loss per share..................    $     (0.79)     $     (2.14)

</TABLE>

(13) INCOME TAXES

     As described in Note 2, the Company joined in filing a consolidated tax 
return as provided for under the terms of a tax sharing agreement with Jones 
International and Jones International's other subsidiaries through the first 
quarter of 1997. Pursuant to the terms of the agreement, tax (provisions) 
benefits are allocated to members of the tax sharing group based on their 
respective pro rata contribution of taxable income (loss) to Jones 
International's consolidated taxable income (loss). Income tax benefit 
(provision) recognized as a result of the tax sharing arrangement were 
approximately $387,000, $1,342,000 and ($49,000) for the years ended December 
31, 1996, 1997 and 1998. The difference between the statutory federal income 
tax rate and effective rate is summarized as follows:

<TABLE>
<CAPTION>
                                                                             December 31,
                                                                  1996           1997            1998
                                                               ----------    ------------     ------------
<S>                                                            <C>           <C>              <C>
Computed "expected tax benefit".............................   $ 743,000     $ 1,692,000      $ 3,991,000
State taxes, net of federal benefit.........................      72,000         157,000          371,000
Other.......................................................      20,000          28,000          (35,000)
                                                               ---------     -----------      -----------
                                                                 835,000       1,877,000        4,327,000
Valuation allowance.........................................    (835,000)     (1,877,000)      (4,327,000)
                                                               ---------     -----------      -----------
Tax benefit (provision)before impact of tax sharing 
  agreement.................................................          --              --               --
Impact of tax sharing agreement (through April 2, 1997).....     387,000       1,342,000          (49,000)
                                                               ---------     -----------      -----------
Total income tax benefit (provision)........................   $ 387,000     $ 1,342,000      $   (49,000)
                                                               ---------     -----------      -----------
                                                               ---------     -----------      -----------

</TABLE>

                                       53

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


    The tax effect of temporary differences that give rise to significant 
portions of the deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                         1997             1998
                                                        ------           ------
<S>                                                  <C>              <C>
DEFERRED TAX ASSETS:
Net operating loss carry forwards..................  $ 1,654,000      $ 5,498,000
Future deductible amounts associated with 
  other assets and liabilities.....................      154,000          391,000
                                                     -----------      -----------
    Total..........................................    1,808,000        5,889,000
DEFERRED TAX LIABILITIES:
Net assets of MediaAmerica.........................           --       (4,200,000)
Property and equipment.............................     (706,000)        (753,000)
Valuation allowance................................   (1,102,000)        (936,000)
                                                     -----------      -----------
Net deferred tax assets............................  $        --      $        --
                                                     -----------      -----------
                                                     -----------      -----------

</TABLE>

     At December 31, 1998, the Company had net tax operating loss 
carryforwards ("NOLs") of approximately $9.8 million which expire between 
2007 and 2008. Although management expects future results of operations to 
improve, it recognized the Company's past performance rather than growth 
projections when determining the valuation allowance. Any subsequent 
adjustment to the valuation allowance, if deemed appropriate due to changed 
circumstances, will be recognized as a separate component of the provision 
for income taxes.

(15) COMMITMENTS AND CONTINGENCIES

      GAC EQUITY AGREEMENTS--In the first quarter of 1998, Great American 
Country and the Company entered into equity affiliate agreements with two 
multiple cable system operators ("MSOs"). Pursuant to the terms of such 
agreements, the Company agreed to issue shares of Class A Common Stock to the 
MSOs in return for the MSOs providing Great American Country's programming to 
no less than 550,000 of their subscribers by May 31, 1998, an additional 
500,000 subscribers by December 31, 1998 and an additional 150,000 
subscribers by December 31, 1999. The total number of shares of Class A 
Common Stock to be issued is based on the number of subscribers provided by 
the MSOs. As of December 31, 1998, 101,124 shares of Class A Common Stock had 
been issued to one of the MSOs. Pursuant to the guidelines of SFAS No. 123 
"Accounting for Stock-Based Compensation," the value of the Class A Common 
Stock was recorded as an intangible asset upon execution of the affiliate 
agreements and upon issuance of the Class A Common Stock. This intangible is 
being amortized using the straight-line method over the life of the contract 
(approximately 10 years). Because of a put option granted to the MSO, the 
shares issued to that MSO are presented above the Shareholders' Deficit 
section of the Statements of Financial Position. The amount of accretion from 
the value of the shares issued to the put option at the exercise date is not 
significant.

      As noted above, one of the MSOs was granted a put option on the Common 
Stock issued, whereby, if as of December 31, 2001, the Company or its 
successor has not completed a public offering of its securities, the MSO 
would have the option within 60 days of such date to require the Company to 
buy back its Class A Common Stock at a price equal to all or a portion of the 
license fees that would have been paid during the period between the date of 
the agreement and the exercise date of the put option. The purchase price 
would be based on the total number of MSO subscribers receiving the Great 
American Country service as of December 31, 1998. Based on the number of 
subscribers receiving the Great American Country service at 

                                       54

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


December 31, 1998, the estimated purchase price of the Class A Common Stock 
in the event the put option is exercised would be approximately $1,020,000.

      The Company rents office facilities under various operating lease 
agreements. As of December 31, 1998, future minimum lease payments under 
these noncancelable operating leases for each of the next five fiscal years 
and thereafter, are as follows:

<TABLE>
<CAPTION>
                   Facilities
                     Leases
                   -----------
<S>                <C>
1999               $   644,520
2000                   666,407
2001                   671,124
2002                   657,650
2003                   509,436
Thereafter           1,042,599
                   -----------
                   $ 4,191,736
                   -----------
                   -----------

</TABLE>

(16)  CONDENSED CONSOLIDATING FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS

     The Notes are fully and unconditionally guaranteed, jointly and 
severally, on a senior unsecured basis by the following wholly-owned 
subsidiaries of the Company: JPN, Inc., Jones Space Holdings, Inc., Jones 
Earth Segment, Inc., Jones Infomercial Networks, Inc., Jones Radio Holdings, 
Inc., Great American Country, Inc., Jones Galactic Radio, Inc., Jones 
Infomercial Network Ventures, Inc., Jones Galactic Radio Partners, Inc., 
Jones Radio Network, Inc., Jones Audio Services, Inc., Jones Radio Network 
Ventures, Inc., MediaAmerica, Inc. and Jones MAI Radio, Inc. and Jones/Owens 
Radio Programming LLC (collectively, the "Subsidiary Guarantors"). The only 
existing subsidiaries of the Company that did not guarantee the Notes are the 
following three entities: the PIN Venture, Superaudio and Jones/Capstar 
(collectively, the "Non-Guarantor Subsidiaries").

     The Company has not provided separate complete financial statements and 
other disclosures of the respective Subsidiary Guarantors because management 
has determined that such information is not material to investors. There are 
no significant contractual restrictions on distributions from each of the 
Subsidiary Guarantors to the Company.

     Investments in subsidiaries are required to be accounted for by 
investors on the equity method for purposes of the supplemental condensed 
consolidating financial statement presentation. Under this method, 
investments are recorded at cost and adjusted for the investor company's 
ownership share of the subsidiaries' cumulative results of operations. In 
addition, investments increase in the amount of contributions to subsidiaries 
and decrease in the amount of distributions from subsidiaries. The 
elimination entries eliminate the equity method accounting for the investment 
in subsidiaries and the equity in earnings of subsidiaries, intercompany 
payables and receivables and other transactions between subsidiaries 
including contributions and distributions.

                                       55

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Sections 13 and 15(d) of the Securities Exchange Act of 1934 require 
presentation of the following supplemental condensed consolidating financial 
statements. Presented below is condensed consolidating financial information 
for the Company and its subsidiaries as of and for the years ended 
December 31, 1996, 1997 and 1998.

             CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                   FOR THE YEAR ENDED DECEMBER 31, 1996:

<TABLE>
<CAPTION>
                                                                                    NON-
                                                        THE       SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY     GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      -------     ----------     ------------     -----------     --------
                                                                               (IN THOUSANDS)
<S>                                                   <C>         <C>            <C>              <C>             <C>
INCOME STATEMENT DATA:
REVENUES:
  Radio programming.................................  $   477      $ 6,519         $    --          $   (18)      $ 6,978 
  Television programming............................       --        1,153           8,038           (8,038)        1,153 
  Satellite delivery and production support.........       --        8,523              --               --         8,523
                                                      -------      -------         -------          -------       -------
    Total revenues..................................      477       16,195           8,038           (8,056)       16,654
                                                      -------      -------         -------          -------       -------
OPERATING EXPENSES:
  Radio programming.................................      420        3,761              --              (18)        4,163 
  Television programming............................                 1,157           5,922           (5,922)        1,157 
  Satellite delivery and production support.........       --        5,451              --               --         5,451 
  Selling and marketing.............................      100        1,637             240             (240)        1,737 
  General and administrative........................      579        2,691             751             (751)        3,270
                                                      -------      -------         -------          -------       -------
    Total operating expenses........................    1,099       14,697           6,913           (6,931)       15,778
                                                      -------      -------         -------          -------       -------
      OPERATING INCOME (LOSS).......................     (622)       1,498           1,125           (1,125)          876
                                                      -------      -------         -------          -------       -------
OTHER EXPENSE (INCOME):
  Interest expense..................................      744        3,940              30             (214)        4,500 
  Interest income...................................     (177)         (75)             (2)             182           (72)
  Write-off of deferred offering costs..............       --           --              --               --            --
  Equity share of loss (income) of subsidiaries.....    1,200         (829)             --           (1,200)         (829)
  Other expense (income), net.......................       --          (12)             21              (21)          (12)
                                                      -------      -------         -------          -------       -------
    Total other expense (income)....................    1,767        3,024              49           (1,253)        3,587
                                                      -------      -------         -------          -------       -------
  Income (loss) before income taxes and minority
    interests.......................................   (2,389)      (1,526)          1,076              128        (2,711)
  Income tax benefit................................     (377)         (10)             --               --          (387)
                                                      -------      -------         -------          -------       -------
  Income (loss) before minority interests...........   (2,012)      (1,516)          1,076              128        (2,324)
  Minority interests in net loss of consolidated
    subsidiaries....................................       --           --              --               (9)           (9)
                                                      -------      -------         -------          -------       -------
NET INCOME (LOSS)...................................  $(2,012)     $(1,516)        $ 1,076          $   137       $(2,315)
                                                      -------      -------         -------          -------       -------
                                                      -------      -------         -------          -------       -------

</TABLE>

                                       56

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                       FOR THE YEAR ENDED DECEMBER 31, 1996:

<TABLE>
<CAPTION>
                                                                                    NON-
                                                        THE       SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY     GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      -------     ----------     ------------     -----------     --------
                                                                               (IN THOUSANDS)
<S>                                                   <C>         <C>            <C>              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)...............................    $(2,012)     $(1,516)        $ 1,076          $   137       $(2,315)
    Adjustment to reconcile net loss to net cash
      provided by (used in) operating activities:
    Non-cash expenses (income)....................          2        4,850              63           (1,276)        3,639
    Distributions received........................         --          300              --               --           300
    Net change in assets and liabilities..........      2,618         (465)           (774)           1,774         3,153
                                                      -------      -------         -------          -------       -------
      Net cash provided by (used in) operating
        activities................................        608        3,169             365              635         4,777
                                                      -------      -------         -------          -------       -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment.......         --       (2,969)           (341)             341        (2,969)
  Sale of property, plant and equipment...........         --           --              15              (15)           --
  Purchases of intangible assets..................         --       (1,002)             --               --        (1,002)
                                                      -------      -------         -------          -------       -------
      Net cash used in investing activities.......         --       (3,971)           (326)             326        (3,971)
                                                      -------      -------         -------          -------       -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in deferred offering costs.............       (608)          --              --               --          (608)
  Repayment of borrowings.........................         --           (8)             --               --            (8)
  Repayment of capital lease obligations..........         --       (1,533)             --               --        (1,533)
  Proceeds from borrowings........................         --        1,342              --               --         1,342 
  Members contributions...........................         --        1,000              --           (1,000)           --
                                                      -------      -------         -------          -------       -------
      Net cash used in financing activities.......       (608)         801              --           (1,000)         (807)
                                                      -------      -------         -------          -------       -------
INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS................................         --           (1)             39              (39)           (1)
CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD.............................         --            5              16              (16)            5
                                                      -------      -------         -------          -------       -------
CASH AND CASH EQUIVALENTS, END OF PERIOD..........    $    --      $     4         $    55          $   (55)      $     4
                                                      -------      -------         -------          -------       -------
                                                      -------      -------         -------          -------       -------

</TABLE>

                                       57

<PAGE>
               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
                            AS OF DECEMBER 31, 1997:

<TABLE>
<CAPTION>
                                                                                     NON-
                                                        THE        SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY      GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      -------      ----------     ------------     -----------     --------
                                                                               (IN THOUSANDS)
<S>                                                   <C>          <C>            <C>              <C>             <C>
ASSETS:
  Cash and cash equivalents......................     $    (25)     $    79         $ 3,663          $    --       $  3,717
  Accounts receivable............................           --          781             674               --          1,455
  Other current assets...........................           --          783              --             (243)           540
                                                      --------      -------         -------          -------       --------
      Total current assets.......................          (25)       1,643           4,337             (243)         5,712
                                                      --------      -------         -------          -------       --------
  Property, plant and equipment..................            7       28,557             212               --         28,776
  Goodwill.......................................           --        3,126                               --          3,126
  Intangible assets..............................           53        1,006               5               --          1,064
  Other long-term assets.........................        1,687        3,770              --           (2,777)         2,680
                                                      --------      -------         -------          -------       --------
      Total assets...............................     $  1,722      $38,102           4,554           (3,020)        41,358
                                                      --------      -------         -------          -------       --------
                                                      --------      -------         -------          -------       --------
LIABILITIES AND SHAREHOLDERS'/MEMBERS'
      INVESTMENT (DEFICIT):
  Accounts payable...............................          417          132             890               --          1,439
  Accrued liabilities............................          312          961              27               --          1,300
  Other current liabilities......................        5,910        5,915             479               --         12,304
                                                      --------      -------         -------          -------       --------
      Total current liabilities..................        6,639        7,008           1,396               --         15,043
                                                      --------      -------         -------          -------       --------
  Note payable-affiliated entities...............       10,000        6,554              --               --         16,554
  Capital lease obligations......................           --       26,335              --               --         26,335
  Other long-term liabilities....................        3,289          282              --           (3,532)            39
                                                      --------      -------         -------          -------       --------
      Total long-term liabilities................       13,289       33,171              --           (3,532)        42,928
                                                      --------      -------         -------          -------       --------
  Minority interests.............................           --           --              --            1,593          1,593
  Shareholders'/members' investment (deficit):
    Class A Common Stock.........................           30            1              --               (1)            30
    Class B Common Stock.........................           18            1              --               (1)            18
    General partners'/members' contributions.....           --        1,000             350           (1,350)            --
    Additional paid-in capital...................        9,143       12,840                          (12,840)         9,143
    Retained earnings (accumulated deficit) .....      (27,397)     (15,919)          2,808           13,111        (27,397)
                                                      --------      -------         -------          -------       --------
      Total shareholders'/members' investment
        (deficit)................................      (18,206)      (2,077)          3,158           (1,081)       (18,206)
                                                      --------      -------         -------          -------       --------
      Total liabilities and shareholders'/members'
        investment (deficit).....................     $  1,722      $38,102         $ 4,554          $(3,020)      $ 41,358
                                                      --------      -------         -------          -------       --------
                                                      --------      -------         -------          -------       --------

</TABLE>

                                       58

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                   CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                        FOR THE YEAR ENDED DECEMBER 31, 1997:

<TABLE>
<CAPTION>
                                                                                     NON-
                                                        THE        SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY      GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      -------      ----------     ------------     -----------     --------
                                                                               (IN THOUSANDS)
<S>                                                   <C>          <C>            <C>              <C>             <C>
INCOME STATEMENT DATA:
  REVENUES:
    Radio programming................................ $     --      $10,301         $    --          $  (101)      $ 10,200 
    Television programming...........................      285        1,230          13,345           (2,858)        12,002 
    Satellite delivery and production support........       --        8,241              --           (1,331)         6,910
                                                      --------      -------         -------          -------       --------
      Total revenues.................................      285       19,772          13,345           (4,290)        29,112
                                                      --------      -------         -------          -------       --------
OPERATING EXPENSES:
  Radio programming..................................       --        5,917              --             (101)         5,816 
  Television programming.............................      148        2,585          10,045           (3,506)         9,272 
  Satellite delivery and production support..........       --        4,685              --               --          4,685 
  Selling and marketing..............................      137        2,489             396             (104)         2,918 
  General and administrative.........................    1,155        2,428             788             (203)         4,168
                                                      --------      -------         -------          -------       --------
      Total operating expenses.......................    1,440       18,104          11,229           (3,914)        26,859
                                                      --------      -------         -------          -------       --------
      OPERATING INCOME (LOSS)........................   (1,155)       1,668           2,116             (376)         2,253
                                                      --------      -------         -------          -------       --------
OTHER EXPENSE (INCOME):
  Interest expense...................................    2,065        3,612              16              (16)         5,677 
  Interest income....................................       (6)         (25)            (83)               6           (108)
  Write-off of deferred offering costs...............      938           --              --               --            938 
  Equity share of loss (income) of subsidiaries......      663       (1,363)             --              304           (396)
  Other expense (income), net........................       --           35              39               --             74
                                                      --------      -------         -------          -------       --------
      Total other expense (income)...................    3,660        2,259             (28)             294          6,185
                                                      --------      -------         -------          -------       --------
Income (loss) before income taxes and
  minority interests.................................   (4,815)        (591)          2,144             (670)        (3,932)
Income tax provision (benefit).......................   (1,376)        (786)             --              820         (1,342)
                                                      --------      -------         -------          -------       --------
Income (loss) before minority interests..............   (3,439)         195           2,144           (1,490)        (2,590)
Minority interests in net income of
  consolidated subsidiaries..........................       --           --              --              903            903   
                                                      --------      -------         -------          -------       --------
NET INCOME (LOSS).................................... $ (3,439)     $   195         $ 2,144          $(2,393)      $ (3,493)
                                                      --------      -------         -------          -------       --------
                                                      --------      -------         -------          -------       --------

</TABLE>

                                       59

<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                    CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                         FOR THE YEAR ENDED DECEMBER 31, 1997:

<TABLE>
<CAPTION>
                                                                                     NON-
                                                        THE        SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY      GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      -------      ----------     ------------     -----------     --------
                                                                               (IN THOUSANDS)
<S>                                                   <C>          <C>            <C>              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss).................................  $ (3,439)     $   195         $ 2,144          $(2,393)      $ (3,493)
  Adjustment to reconcile net loss to net cash 
    provided by (used in) operating activities:
    Non-cash expenses...............................       640        4,374              82            1,598          6,694 
    Distributions received..........................        --          100              --               --            100 
    Net change in assets and liabilities............     3,540       (1,329)          1,227              850          4,288
                                                      --------      -------         -------          -------       --------
      Net cash provided by operating activities.....       741        3,340           3,453               55          7,589
                                                      --------      -------         -------          -------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment.........        (8)      (1,340)            (19)              --         (1,367)
  Sale of property, plant and equipment.............        --           82             174               --            256
  Purchases of intangible assets....................        (3)         (42)             --               --            (45)
                                                      --------      -------         -------          -------       --------
      Net cash provided by (used in)
        investing activities........................       (11)      (1,300)            155               --         (1,156)
                                                      --------      -------         -------          -------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in deferred offering costs...............      (505)          --              --               --           (505)
  Increase in capitalized loan fees.................       (50)          --              --               --            (50)
  Repayment of capital lease obligation.............        --       (1,965)             --               --         (1,965)
  Acquisition of minority interests.................      (200)          --              --               --           (200)
                                                      --------      -------         -------          -------       --------
      Net cash used in financing activities.........      (755)      (1,965)             --               --         (2,720)
                                                      --------      -------         -------          -------       --------
INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS..................................       (25)          75           3,608               55          3,713 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD......        --            4              55              (55)             4
                                                      --------      -------         -------          -------       --------
CASH AND CASH EQUIVALENTS,
  END OF PERIOD.....................................  $    (25)     $    79         $ 3,663          $    --       $  3,717
                                                      --------      -------         -------          -------       --------
                                                      --------      -------         -------          -------       --------

</TABLE>

                                       60
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION
                                AS OF DECEMBER 31, 1998:

<TABLE>
<CAPTION>
                                                                                     NON-
                                                        THE        SUBSIDIARY      GUARANTOR       ELIMINATION
                                                      COMPANY      GUARANTORS     SUBSIDIARIES       ENTRIES       REPORTED
                                                      --------     ----------     ------------     -----------    ----------
                                                                               (IN THOUSANDS)
<S>                                                   <C>          <C>            <C>              <C>             <C>
ASSETS:
Cash and cash equivalents....................         $  7,881       $    956        $ 1,817         $     --       $ 10,654 
Restricted cash..............................           10,000             --             --               --         10,000 
Available for sale securities................            2,769             --             --               --          2,769 
Accounts receivable..........................               --         11,088            748               --         11,836 
Other current assets.........................               --            847             47               --            894
                                                      --------     ----------     ------------     -----------    ----------
       Total current assets..................           20,650         12,891          2,612               --         36,153
                                                      --------     ----------     ------------     -----------    ----------
Property, plant and equipment................                7         26,598            292               --         26,897 
Goodwill.....................................               --         32,411             --               --         32,411 
Intangible assets............................            4,515          2,205              3               --          6,723 
Other long-term assets.......................           29,854        (18,974)            --           (2,170)         8,710 
                                                      --------     ----------     ------------     -----------    ----------
       Total assets..........................         $ 55,026      $  55,131       $  2,907        $  (2,170)      $110,894
                                                      --------     ----------     ------------     -----------    ----------
                                                      --------     ----------     ------------     -----------    ----------
LIABILITIES AND SHAREHOLDERS'
   INVESTMENT (DEFICIT):
Accounts payable.............................         $    983      $   1,813       $     --        $      --        $ 2,796 
Producers' fees payable......................               --          5,922             --               --          5,922 
Accrued liabilities..........................            5,884          2,238          1,124               --          9,246 
Other current liabilities....................          (41,722)        43,577            286               --          2,141
                                                      --------     ----------     ------------     -----------    ----------
       Total current liabilities.............          (34,855)        53,550          1,410               --         20,105
                                                      --------     ----------     ------------     -----------    ----------
Senior secured notes.........................          100,000             --             --               --        100,000 
Other long-term liabilities..................               --            341             --               --            341
                                                      --------     ----------     ------------     -----------    ----------
       Total long-term liabilities...........          100,000            341             --               --        100,341
                                                      --------     ----------     ------------     -----------    ----------
Minority interests...........................               --             --             --              567            567 
Common stock subject to put..................            1,213             --             --               --          1,213 
Shareholders' investment (deficit):
   Class A Common Stock......................               42             --             --               --             42 
   Class B Common Stock......................               18             --             --               --             18 
   General Partners' Contributions...........               --          1,000            350           (1,350)            --
   Additional paid-in capital................           27,447             --             --               --         27,447 
   Other comprehensive income................                9             --             --               --              9 
   Retained earnings (accumulated
   deficit)..................................          (38,848)           240          1,147           (1,387)       (38,848)
                                                      --------     ----------     ------------     -----------    ----------
       Total shareholders'
         investment (deficit)................          (11,332)         1,240          1,497           (2,737)       (11,332)
                                                      --------     ----------     ------------     -----------    ----------
       Total liabilities and shareholders'
         investment (deficit)................         $ 55,026       $ 55,131        $ 2,907         $ (2,170)      $110,894
                                                      --------     ----------     ------------     -----------    ----------
                                                      --------     ----------     ------------     -----------    ----------
</TABLE>

                                       61
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

               CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                     FOR THE YEAR ENDED DECEMBER 31, 1998:

<TABLE>
<CAPTION>
                                                                             NON-
                                                         THE    SUBSIDIARY  GUARANTOR    ELIMINATION
                                                       COMPANY  GUARANTORS SUBSIDIARIES    ENTRIES    REPORTED
                                                     ---------- ---------- ------------  -----------  --------
                                                                        (IN THOUSANDS)
<S>                                                  <C>        <C>        <C>           <C>          <C>
INCOME STATEMENT DATA:

REVENUES:

  Radio programming...............................   $       --  $ 10,041     $    --    $    --      $ 10,041 
  Radio representation............................           --     5,107          --         --         5,107 
  Television programming..........................          173     2,556      14,163         --        16,892 
  Satellite delivery and production support.......           --     7,893          --     (1,721)        6,172
                                                     ---------- ---------- ------------  -----------  --------
    Total revenues................................          173    25,597      14,163     (1,721)       38,212
                                                     ---------- ---------- ------------  -----------  --------

OPERATING EXPENSES:

  Radio programming...............................           --     7,778          --         --         7,778 
  Radio representation............................           --     1,129          --         --         1,129 
  Television programming..........................           87     2,825      13,040     (1,721)       14,231 
  Satellite delivery and production support.......           --     5,240          --         --         5,240 
  Selling and marketing...........................           58     4,510         301         --         4,869 
  General and administrative......................        1,132     5,142         454         --         6,728
                                                     ---------- ---------- ------------  -----------  --------
    Total operating expenses......................        1,277    26,624      13,795     (1,721)       39,975
                                                     ---------- ---------- ------------  -----------  --------
OPERATING INCOME LOSS.............................       (1,104)   (1,027)        368         --        (1,763)
                                                     ---------- ---------- ------------  -----------  --------
OTHER EXPENSE (INCOME):

  Interest expense................................        7,173     1,798          --         --         8,971 
  Interest income.................................         (615)      (33)       (128)        --          (776)
  Equity share of loss (income) of subsidiaries...        3,100    (3,213)         --        170            57 
  Other expense (income), net.....................        1,190       (31)         12         --         1,171   
                                                     ---------- ---------- ------------  -----------  --------
    Total other expense (income)..................       10,848    (1,479)       (116)       170         9,423
                                                     ---------- ---------- ------------  -----------  --------
  Income (loss) before income taxes 
    and minority interests........................      (11,952)      452         484       (170)      (11,186)
  Income tax provision............................            1        48          --         --            49
                                                     ---------- ---------- ------------  -----------  --------
  Income (loss) before minority interests.........      (11,953)      404         484       (170)      (11,235)
                                                     ---------- ---------- ------------  -----------  --------
  Minority interests in net income 
    of consolidated subsidiaries..................           --        --          --        215           215
                                                     ---------- ---------- ------------  -----------  --------
  NET INCOME (LOSS)...............................   $  (11,953)  $   404     $   484    $  (385)     $(11,450)
                                                     ---------- ---------- ------------  -----------  --------
                                                     ---------- ---------- ------------  -----------  --------
</TABLE>

                                       62
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                        CONDENSED CONSOLIDATING CASH FLOWS
                      FOR THE YEAR ENDED DECEMBER 31, 1998:

<TABLE>
<CAPTION>
                                                                                           NON-
                                                                      THE     SUBSIDIARY   GUARANTOR   ELIMINATION
                                                                    COMPANY   GUARANTORS SUBSIDIARIES    ENTRIES    REPORTED
                                                                 ------------ ---------- ------------ -----------  ----------
                                                                                           (IN THOUSANDS) 
<S>                                                              <C>          <C>        <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income (loss)...........................................    $(11,953)   $    404       $   484      $  (385)   $(11,450)
  Adjustment to reconcile net income (loss) to net cash                       
    provided by (used in) operating activities:                               
    Non-cash expenses (income)................................         204       5,856            97          385       6,542 
    Distributions received....................................          --         350            --           --         350 
    Net change in assets and liabilities......................      (4,625)      1,979          (106)          --      (2,752)
                                                                 ------------  ---------- ------------ -----------  ----------
      Net cash provided by (used in) operating                                
        activities............................................     (16,374)      8,589           475           --      (7,310)
                                                                 ------------  ---------- ------------ -----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:                                         
                                                                              
  Purchase of property, plant and equipment...................          --      (2,067)         (191)          --      (2,258)
  Sale of property, plant and equipment.......................          --          41            16           --          57
  Dividend from joint venture.................................         914          --            --         (914)         --
  Purchase of investments.....................................      (2,760)         --            --           --      (2,760)
  Purchase of intangible assets...............................          --      (3,359)           --           --      (3,359)
  Purchase of MediaAmerica, Inc...............................     (26,700)         --            --           --     (26,700)
                                                                 ------------ ---------- ------------ -----------  ----------
      Net cash provided by (used in) investing activities.....     (28,546)     (5,385)         (175)        (914)    (35,020)
                                                                 ------------ ---------- ------------ -----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:                                         
                                                                              
  Increase in deferred offering costs.........................      (4,187)       (115)           --           --      (4,302)
  Advances to/from subsidiaries...............................     (32,987)     32,987            --           --          --
  Repayment of borrowings.....................................          --      (6,555)           --           --      (6,555)
  Repayment of capital lease obligations......................          --     (28,757)           --           --     (28,757)
  Senior secured notes........................................     100,000          --            --           --     100,000 
  Dividend paid to partners...................................          --          --        (2,146)       2,146          --
  Distributions paid to minority interests....................          --         113            --       (1,232)     (1,119)
                                                                 ------------ ---------- ------------ -----------  ----------
      Net cash provided by (used in) financing activities.....      62,826      (2,327)       (2,146)         914      59,267
                                                                              
INCREASE (DECREASE) IN CASH AND CASH                                          
  EQUIVALENTS.................................................      17,906         877        (1,846)          --      16,937 
CASH AND CASH EQUIVALENTS, BEGINNING OF                                       
  PERIOD......................................................         (25)         79         3,663           --       3,717 
                                                                 ------------ ---------- ------------ -----------  ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD......................    $ 17,881    $    956       $ 1,817      $    --    $ 20,654 
                                                                 ------------ ---------- ------------ -----------  ----------
                                                                 ------------ ---------- ------------ -----------  ----------
</TABLE>

(17)    REPORTABLE SEGMENTS

      The Company has four reportable segments: radio programming and 
representation, television programming, satellite delivery and production 
support, and corporate. The radio programming and representation segment 
produces programming that it distributes to radio stations and sells 
advertising on nationally syndicated radio programs. The television 
programming segment provides cable television programming to cable television 
system operators and other video distributors. The satellite delivery and 
production support segment provides satellite delivery, uplinking, 
trafficking, playback and other services to affiliates and third parties. The 
corporate segment includes personnel and associated costs for the Company's 
executive and management staff, operational support and other items such as 
accounting and financial reporting and debt offering costs.

      The accounting policies of the segments are the same as those described 
in the summary of significant accounting policies in Note 2. The Company 
evaluates performance based on profit or loss from operations before income 
taxes not including nonrecurring gains and losses. The Company accounts for 
intersegment sales and transfers as if the sales or transfers were to third 
parties, that is, at current market prices.

      The Company's reportable segments are strategic business units that 
offer different services and products. They are managed separately because 
each business requires different technology and marketing 

                                       63
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

strategies. Reportable segments are presented below in accordance with the 
requirements of SFAS 131, "Disclosures about Segments of an Enterprise and 
Related Information":

                        REPORTED SEGMENT PROFIT OR LOSS,
                               AND SEGMENT ASSETS
                AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1996:

<TABLE>
<CAPTION>
                                                          Radio                      Satellite                 
                                                       Programming                 Delivery And
                                                           and        Television    Production 
                                                      Representation  Programming     Support     Corporate      Total
                                                      -------------- ------------- ------------  ----------- -------------
<S>                                                  <C>             <C>           <C>           <C>         <C>
Revenue from external customers.....................    $7,658,000    $ 1,154,000  $ 7,842,000   $        --  $16,654,000 
Intersegment revenues...............................            --             --    3,429,000            --    3,429,000 
Interest income.....................................       (14,000)       (23,000)     (35,000)           --      (72,000)
Interest expense....................................            --             --    3,765,000       735,000    4,500,000 
Depreciation and amortization.......................       494,000         24,000    3,957,000         1,000    4,476,000 
Equity in loss (income) of subsidiaries.............       329,000        503,000           --            --      832,000 
Segment loss........................................      (335,000)    (1,558,000)     616,000    (1,038,000)  (2,315,000)
Capital expenditures................................     1,646,000         72,000    1,251,000            --    2,969,000
Other significant non-cash item:
  Goodwill..........................................            --        300,000           --            --      300,000 
Segment assets......................................     5,426,000      1,925,000   30,336,000     4,213,000   41,900,000 


RECONCILIATIONS OF REPORTABLE SEGMENT REVENUE AND
ASSETS:

REVENUES

Total revenues for reportable segments..............                                                          $20,083,000 
Other revenues......................................                                                                   --
Elimination of intersegment revenues................                                                           (3,429,000)
                                                                                                              -----------
  Total consolidated revenues.......................                                                          $16,654,000
                                                                                                              -----------
                                                                                                              -----------
ASSETS

Total assets for reportable segments................                                                          $41,900,000 
Elimination of investment in subsidiaries...........                                                           (3,602,000)
                                                                                                              -----------
  Consolidated total................................                                                          $38,298,000
                                                                                                              -----------
                                                                                                              -----------
</TABLE>

                                       64
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                       REPORTED SEGMENT PROFIT OR LOSS,
                            AND SEGMENT ASSETS
               AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1997:

<TABLE>
<CAPTION>

                                                          Radio                      Satellite                 
                                                       Programming                 Delivery And
                                                           and        Television    Production 
                                                      Representation  Programming     Support     Corporate      Total
                                                      -------------- ------------- ------------  ----------- -------------
<S>                                                  <C>             <C>           <C>           <C>         <C>
Revenue from external customers.....................   $10,833,000   $ 12,002,000  $ 6,276,000   $        --  $29,111,000 
Intersegment revenues...............................            --             --    3,387,000            --    3,387,000 
Interest income.....................................        (6,000)       (93,000)      (3,000)       (6,000)    (108,000)
Interest expense....................................            --             --    3,612,000     2,065,000    5,677,000 
Depreciation and amortization.......................       842,000        222,000    4,100,000         4,000    5,168,000 
Equity in loss (income) of subsidiaries.............       228,000        168,000           --            --      396,000 
Segment profit......................................       450,000        540,000   (1,571,000)   (2,912,000)  (3,493,000)
Capital expenditures................................     1,237,000         28,000       93,000         9,000    1,367,000
Other significant non-cash items:
  Goodwill..........................................            --      3,037,000           --            --    3,037,000 
  Conversion of Global Group Note...................            --             --           --     6,000,000    6,000,000 
Segment assets......................................     5,960,000      8,204,000   25,878,000    (1,973,000)  38,069,000 


RECONCILIATIONS OF REPORTABLE SEGMENT REVENUE AND
ASSETS:

REVENUES
Total revenues for reportable segments..............                                                          $32,498,000 
Other revenues......................................                                                                   --
Elimination of intersegment revenues................                                                           (3,387,000)
                                                                                                              -----------
  Total consolidated revenues.......................                                                          $29,111,000
                                                                                                              -----------
                                                                                                              -----------

ASSETS
Total assets for reportable segments................                                                          $38,069,000 
Elimination of investment in subsidiaries...........                                                            3,289,000
                                                                                                              -----------
  Consolidated total................................                                                          $41,358,000
                                                                                                              -----------
                                                                                                              -----------
                                                                                                             
</TABLE>

                                       65
<PAGE>

               JONES INTERNATIONAL NETWORKS, LTD. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                        REPORTED SEGMENT PROFIT OR LOSS,
                               AND SEGMENT ASSETS
                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1998:

<TABLE>
<CAPTION>

                                                          Radio                      Satellite                 
                                                       Programming                 Delivery And
                                                           and        Television    Production 
                                                      Representation  Programming     Support     Corporate      Total
                                                      -------------- ------------- ------------  ----------- --------------
<S>                                                  <C>             <C>           <C>           <C>         <C>
Revenue from external customers.....................   $15,780,000   $ 16,719,000  $ 5,540,000   $   173,000  $ 38,212,000 
Intersegment revenues...............................            --             --    3,581,000            --     3,581,000 
Interest income.....................................       (33,000)      (128,000)          --      (615,000)     (776,000)
Interest expense....................................            --             --    1,798,000     7,173,000     8,971,000 
Depreciation and amortization.......................     1,598,000        697,000    3,966,000         5,000     6,266,000 
Equity in loss (income) of subsidiaries.............        57,000             --           --            --        57,000 
Segment loss........................................    (1,017,000)      (775,000)    (893,000)   (8,765,000)  (11,450,000)
Capital expenditures................................       582,000        336,000    1,337,000         3,000     2,258,000
Other significant non-cash item:                                                                             
  Purchase of MediaAmerica..........................            --             --           --     8,144,000     8,144,000 
Segment assets......................................    48,545,000     12,437,000   23,183,000    55,219,000   139,384,000 
                                                                                                             

RECONCILIATIONS OF REPORTABLE SEGMENT REVENUE AND                                                            
ASSETS:                                                                                                      
                                                                                                             
REVENUES
Total revenues for reportable segments..............                                                          $ 41,793,000 
Other revenues......................................                                                                    --
Elimination of intersegment revenues................                                                            (3,581,000)
                                                                                                              ------------
                                                                                                             
  Total consolidated revenues.......................                                                          $ 38,212,000
                                                                                                              ------------
                                                                                                              ------------
ASSETS                                                                                                       
Total assets for reportable segments................                                                          $139,384,000 
Elimination of investment in subsidiaries...........                                                           (28,490,000) 
                                                                                                              ------------
                                                                                                             
  Consolidated total................................                                                          $110,894,000
                                                                                                              ------------
                                                                                                              ------------
</TABLE>

                                       66
<PAGE>

                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders 
of Jones International Networks, Ltd.:

      We have audited in accordance with generally accepted auditing 
standards, the consolidated financial statements of Jones International 
Networks, Ltd. and subsidiaries as of December 31, 1997 and 1998, and for the 
years ended December 31, 1996, 1997 and 1998 included in this Form 10-K, and 
have issued our report thereon dated February 11, 1999. Our audits were made 
for the purpose of forming an opinion on these financial statements taken as 
a whole. The supplemental schedule listed in Part IV, Item 14 of this Form 
10-K is the responsibility of the Company's management and is presented for 
purposes of complying with the Securities and Exchange Commissions rules and 
is not part of the financial statements. The schedule has been subjected to 
the auditing procedures applied in the audits of the financial statements 
and, in our opinion, fairly states in all material respects the financial 
data required to be set forth therein in relation to these financial 
statements taken as a whole.

                                                      ARTHUR ANDERSEN LLP

Denver, Colorado
February 11, 1999

                                       67
<PAGE>

                                                                    SCHEDULE II

                   JONES INTERNATIONL NETWORKS, LTD. AND SUBSIDIARIES

                           VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
                                                    Balance          Additions         Deductions
                                                      at            charged to            for                Balance
                                                   beginning        costs and           accounts            at end of
                                                   of period         expenses          written-off           period
<S>                                            <C>              <C>               <C>                <C>
Classifications
Fiscal Year ended December 31, 1998:           $     157,405    $     858,765     $       (118,683)  $       897,487
    Allowance for Doubtful Accounts......
Fiscal Year ended December 31, 1997:
    Allowance for Doubtful Accounts......            286,562          114,357             (243,514)          157,405
Fiscal Year ended December 31, 1996:
    Allowance for Doubtful Accounts......            224,808          130,381              (68,627)          286,562
</TABLE>

                                       68
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE
                                          
     Not applicable.
                                          


                                      PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The Company's Articles of Incorporation provide that, with respect to 
the election of Directors, the holders of Class A Common Stock, voting as a 
separate class, are entitled to elect that number of Directors constituting 
25% of the total membership of the Board of Directors.  If such 25% is not a 
whole number, holders of Class A Common Stock are entitled to elect the 
nearest higher whole number of Directors constituting 25% of the membership 
of the Board of Directors.  Holders of Class B Common Stock, voting as a 
separate class, are entitled to elect the remaining Directors.  Directors of 
the Company serve until the next annual meeting of the Company and until 
their successors shall be elected and qualified.

     Set forth below is certain information concerning each person who is an 
executive officer or director of the Company. Information is also provided 
for certain key employees. All directors hold office for a period of one year 
or until their respective successors are elected and qualified, or until 
their earlier resignation or removal. 

<TABLE>
<CAPTION>
NAME                     POSITION                                           AGE
----                     --------                                           ---
<S>                      <C>                                                <C>
Glenn R. Jones  . . . .  Chairman of the Board                               69
Gregory J. Liptak . . .  President and Director                              58
Jay B. Lewis  . . . . .  Group Vice President/Finance, Chief Financial       40
                         Officer and Director
Jeffrey C. Wayne  . . .  President, Cable Programming Networks(1)            44
Gary Schonfeld  . . . .  Chief Executive Officer--MediaAmerica(1)(2)         46
Ron Hartenbaum  . . . .  President --Radio Network and Director(1)(2)        46
Phil Barry  . . . . . .  Vice President/General Manager--Radio Network(1)    45
Keith D. Thompson . . .  Chief Accounting Officer                            31
Elizabeth M. Steele . .  Vice President and Secretary                        46
Yrma G. Rico  . . . . .  Director                                            49
Fred A. Vierra  . . . .  Director                                            66

</TABLE>

-------------------
(1)  Key employee; an officer of a subsidiary, but not of the Company itself. 

                                       69

<PAGE>

(2)  Pursuant to an agreement entered into in connection with the Acquisition,
     Messrs. Hartenbaum and Schonfeld may nominate one member of the Board of
     Directors. This right terminates upon the earlier of the ninth anniversary
     of the consummation of the Acquisition and the date on which, among other
     things, the direct or indirect ownership of Messrs. Hartenbaum and
     Schonfeld in the Company's common stock falls below certain levels. 

     The principal occupations for at least the past five years of each of 
the directors, executive officers and certain key employees of the Company 
are as follows: 

     GLENN R. JONES has been involved in the cable television business in 
various capacities since 1961 and currently serves as a director and/or 
executive officer of many of the Company's affiliates, including Chief 
Executive Officer and a director of Jones Intercable. He has been Chairman of 
the Board of the Company since 1993. Mr. Jones will continue to devote a 
substantial amount of his time to the Company's business.  Mr. Jones is a 
member of the Board of Directors and of the Executive Committee of the 
National Cable Television Association.  In addition, Mr. Jones is a member of 
the Board and Education Council of the National Alliance of Business.  Mr. 
Jones is also a founding member of the James Madison Council of the Library 
of Congress.  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 President's Award from the Cable 
Television Public Affairs Association in recognition of Jones International's 
educational efforts through Mind Extension University (now Knowledge TV); the 
Donald G. McGannon Award for the advancement of minorities and women in cable 
from the United Church of Christ Office of Communications; 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; the 
Cableforce 2000 Accolade awarded by Women in Cable in recognition of the 
Company's innovative employee programs; the Most Outstanding Corporate 
Individual Achievement Award from the International Distance Learning 
Conference for his contributions to distance education; the Golden Plate 
Award from the American Academy of Achievement for his advances in distance 
education; the Man of the Year named by the Denver chapter of the Achievement 
Rewards for College Scientists; and in 1994 Mr. Jones was inducted into 
Broadcasting and Cable's Hall of Fame.

     GREGORY J. LIPTAK has served as a director of the Company since 1993, 
was elected an Assistant Vice President in January 1996 and was elected as 
President in October 1996. Mr. Liptak has been associated with the Jones 
International group of companies since March 1985. He has served as Vice 
President of Operations, Group Vice President of Operations and President of 
Jones Intercable from 1985 to 1989, as President of Mind Extension 
University, Inc. (now Knowledge TV, Inc.), a subsidiary of Jones 
International, and President of Jones Spacelink, Ltd., a former affiliate of 
the Company, from 1989 to 1995. From 1975 to 1985, Mr. Liptak served as an 
executive officer of Times Mirror Cable Television, Inc.  Mr. Liptak was also 
the co-founder and first president of CTAM, the Cable Television Marketing 
Society, and has also served 

                                       70

<PAGE>

as Chairman of the Cable Television Advertising Bureau, and currently serves 
as Chairman of the National Cable Television Cooperative. 

     JAY B. LEWIS has served as Vice President/Finance and as Chief Financial 
Officer of the Company since July 1996 and was elected Group Vice 
President/Finance, and appointed as a director, in October 1996. Mr. Lewis 
has also served as Treasurer of the Company since September 1994. From 
January 1995 until October 1996, Mr. Lewis was Vice President of Finance and 
Treasurer of Jones International, the parent of the Company, and certain of 
its subsidiaries. From February 1986 to December 1994, Mr. Lewis was employed 
in various capacities, including Controller and Treasurer, by Jones 
Spacelink, Ltd., a former affiliate of the Company. Prior to joining the 
Jones International group of companies, Mr. Lewis was employed by Arthur 
Young & Co. (now Ernst & Young LLP), a public accounting firm.

     KEITH D. THOMPSON has served as Chief Accounting Officer of the Company 
since October 1996. Mr. Thompson also serves as Chief Accounting Officer of 
several of the Company's affiliates. Mr. Thompson has been associated with 
Jones International since October 1994, serving as Senior Accountant from 
October 1994 to April 1995, as Accounting Manager from April 1995 to January 
1996, as Director of Accounting from January 1996 to July 1997, and 
Controller from July 1997 to present. Mr. Thompson will continue to devote a 
substantial amount of his time to Jones International and its affiliates. 
From July 1989 to October 1994, Mr. Thompson was an auditor for Deloitte & 
Touche LLP. Mr. Thompson is a member of both the American and Colorado 
Societies of Certified Public Accountants. 

     JEFFREY C. WAYNE has served as President and Chief Operating Officer, 
Cable Network Operations for the Company and as Vice President/General 
Manager for Great American Country since July 1997 and was elected President, 
Cable Programming Networks and as President/General Manager for Great 
American Country in January 1998. Mr. Wayne is a 21-year veteran of the cable 
television industry. From 1995 to July 1997, Mr. Wayne was Vice President of 
Programming for The Providence Journal's Broadcast Division. At The 
Providence Journal, he was responsible for overseeing a portfolio of cable 
network programming ventures including The Television Food Network and 
America's Health Network. At the Providence Journal, Mr. Wayne served as 
acting President of The Television Food Network; the network's subscriber 
base grew from 13 to over 20 million during his tenure. From 1978 to 1995, 
Mr. Wayne held various marketing positions with Colony Communications, Inc., 
a top 20 multiple system cable operator with over 800,000 subscribers, 
serving as Executive Director of Marketing and Ad Sales from 1988 to 1993 and 
Vice President of Marketing and Ad Sales from 1994 to 1995.

     GARY SCHONFELD is the co-founder of MediaAmerica and has served as its 
President since its formation in 1987. Mr. Schonfeld became the Chief 
Executive Officer--MediaAmerica upon the consummation of the Acquisition in 
July 1998. Mr. Schonfeld has over 20 years of experience in the sales arena, 
including Vice-President Eastern 

                                       71

<PAGE>

Sales Region for Westwood One. Previously Mr. Schonfeld served as an account 
executive with CBS Radio Networks and in various positions with Fairchild 
Publications, Y&R Advertising and ABC Radio.

     RON HARTENBAUM is the co-founder of MediaAmerica, which was founded in 
1987, and has been its Chairman since its formation. Mr. Hartenbaum became 
the President--Radio Network and a Director of the Company upon the 
consummation of the Acquisition in July 1998. Mr. Hartenbaum has over 20 
years of experience in radio advertising sales. Before forming MediaAmerica, 
Mr. Hartenbaum was Vice-President and Director of Advertising Sales for 
Westwood One for six years, growing sales from $5 million to over $50 million 
in that period. Prior to joining Westwood One, Mr. Hartenbaum was involved in 
advertising sales for ABC Radio and advertising development at ad agencies 
Needham Harper Worldwide and Grey Advertising for national advertisers 
including Procter & Gamble and General Mills.

     PHIL BARRY, whose proper name is Phillip H. Baykian, has served as Vice 
President of Programming--Radio Networks since 1991 and was elected Vice 
President/General Manager--Radio Networks in December 1998.  Mr. Barry has 
nearly 25 years in on-air and programming experience. He served as Vice 
President of Programming for Drake Chenault Radio Consultants in Albuquerque, 
New Mexico from 1986 to 1991. Previously, he was Operations Consultant for TM 
Programming, a radio industry programming consultant company, from 1981 to 
1986.

     ELIZABETH M. STEELE has served as Secretary of the Company since it was 
founded in 1993 and as Vice President of the Company since November 1995. Ms. 
Steele has also served as Vice President/General Counsel and Secretary of 
Jones Intercable, as well as general counsel to certain of Jones Intercable's 
and the Company's affiliates since 1987. Ms. Steele will continue to devote a 
significant amount of her time to these affiliates. From 1980 through 1987, 
Ms. Steele practiced law with the Denver law firm of Davis, Graham & Stubbs 
LLP, where she was elected a partner in 1985.

     YRMA G. RICO is General Manager of KCEC-TV, Channel 50 in Denver, 
Colorado, a position she has held since 1992. Ms. Rico became a member of the 
Board of Directors of the Company in July 1998.  She has 19 years of 
experience in the television industry and has served as the National Sales 
Manager for KCEC-TV and WNAC-TV, headquartered in Providence, Rhode Island. 

     FRED A. VIERRA is the Vice Chairman of the Board of Directors of, and a 
consultant to, Tele-Communications International, Inc. ("TINTA"), positions 
he has held since January, 1998. Mr. Vierra became a member of the Board of 
Directors of the Company in July 1998.  From 1994 to January 1998, he served 
as TINTA's Vice Chairman, President and Chief Executive Officer. From 1992 to 
1994, he served as an Executive Vice President of TCI. Mr. Vierra served as 
the President of United Artists Entertainment Company ("UAE") from 1989 to 
1991 and as the President of United Cable Television Corporation from 1982 to 
1989, when the company was merged into 

                                       72

<PAGE>

UAE. Mr. Vierra is a member of the Board of Directors of Flextech plc, 
Torneos y Compotencias S.A. and Formus Communications, Inc. Mr. Vierra has 
previously served as a member of the Board of Directors of Turner 
Broadcasting, the Discovery Channel, Princes Holdings Ltd., Australas Media 
Ltd. and Telewest plc.

                         ITEM 11.   EXECUTIVE COMPENSATION

     The following table sets forth certain information regarding the 
compensation for services in all capacities to the Company for the years 
ended December 31, 1996, 1997 and 1998 for the President of the Company and 
the other five most highly compensated executive officers and key employees 
of the Company and its subsidiaries whose total annual salary and bonus 
attributable to such entities exceeded $100,000 (collectively, the "Named 
Executive Officers"). Mr. Jones was President of the Company during 1995 and 
through October 1996 and has been Chairman of the Board during all such 
periods. He did not receive any compensation for services rendered to the 
Company during such periods. 

                            SUMMARY COMPENSATION TABLE 

<TABLE>
<CAPTION>
                                                                     ANNUAL COMPENSATION                     
                                                           -------------------------------------------       LONG TERM
                                                                                          ALL OTHER        COMPENSATION
NAME AND PRINCIPAL POSITION                        YEAR    SALARY          BONUS       COMPENSATION(1)      AWARDS (5)
---------------------------                        ----    ------          -----       ---------------     ------------
<S>                                                <C>    <C>             <C>          <C>                 <C>
Gregory J. Liptak(2).............................  1998   $ 283,879       $75,000          $17,033            50,000
President                                          1997     283,879           --            22,417               --
                                                   1996     127,746        38,250           15,566               --

Jay B. Lewis(3)..................................  1998     175,008        75,000           14,100            50,000
Group Vice President/Finance and                   1997     150,007        60,000            9,000               --
Chief Financial Officer                            1996      44,287           --             3,543               --

Jeffrey C. Wayne.................................  1998     170,007        90,275           10,200            20,000
President, Cable Programming Networks              1997      76,897(4)        --            37,215               --
                                                   1996         --            --               --                --

Eric Hauenstein..................................  1998     161,270           --            10,407            20,000
President/General Manager--Radio Network           1997     150,015        13,900            6,883               --
                                                   1996     139,006           --             8,340               --

Ron Hartenbaum...................................  1998     141,667(6)        --               --                --
President - Jones Radio and a Director

Gary Schonfeld...................................  1998     141,667(6)        --               --                --
Chief Executive Officer - MediaAmerica

</TABLE>

(1)  The Company's employees are entitled to participate in a 401(k) profit
     sharing plan and/or a deferred compensation plan. The amounts shown in this
     column represent the Company's contributions to the 401(k) profit sharing
     plan and/or the deferred 

                                       73

<PAGE>

     compensation plan for the benefit of the named person's account and, with 
     respect to Mr. Wayne, includes $33,615 reimbursed to him for moving 
     expenses in 1997. 

(2)  Mr. Liptak became President of the Company in October 1996. Mr. Liptak's
     total compensation for services rendered to the Company during 1996
     represents an allocation to the Company of the total compensation paid to
     Mr. Liptak by Jones International for these years based upon the time
     allocated to the Company's business. Mr. Liptak serves as an executive
     officer and director of certain of the Company's affiliates. Since the
     beginning of 1997, Mr. Liptak has devoted all of his time to the business
     of the Company. 

(3)  Mr. Lewis' total compensation for services rendered to the Company during
     1996 represents an allocation to the Company of the total compensation paid
     to Mr. Lewis by Jones International for 1996 based upon the time allocated
     to the Company's business.

(4)  Reflects compensation from July 1997 when Mr. Wayne joined the Company. 

(5)  Represents the number of shares of the Company's Class A Common Stock
     underlying the stock options granted.

(6)  Partial year payment.

     The Company has agreed to give Mr. Wayne a $250,000 bonus if certain
defined levels of distribution in the cable programming network are reached
within approximately three years. 

                                       74

<PAGE>

                               OPTION GRANTS IN 1998

     The following table sets forth information with respect to grants of 
stock options during 1998 for the Executive Officers named in the Summary 
Compensation Table.

<TABLE>
<CAPTION>
                                                                            POTENTIAL REALIZABLE VALUE
                                                                              AT ASSUMED ANNUAL RATES
                                                                            OF STOCK PRICE APPRECIATION
                                 INDIVIDUAL GRANTS                              FOR OPTION TERM (2)
------------------------------------------------------------------------    ---------------------------
                                    % OF TOTAL 
                                      OPTIONS
                                    GRANTED TO
                                       ALL
                                     EMPLOYEES   EXERCISE
                        OPTIONS        IN         PRICE       EXPIRATION
       NAME            GRANTED(1)     1998       ($/SHARE)       DATE       5% ANNUAL        10% ANNUAL
       ----            ----------   ----------   ---------    ----------    ---------        ----------
<S>                    <C>          <C>          <C>          <C>           <C>              <C>
Gregory J. Liptak        50,000       14.49%       $15.00     07/10/08      $ 471,675        $1,195,307

Jay B. Lewis             50,000       14.49%       $15.00     07/10/08      $ 471,675        $1,195,307

Jeffrey C. Wayne         20,000        5.80%       $15.00     07/10/08      $ 188,670        $  478,110

Eric Hauenstein(3)       20,000        5.80%       $15.00     07/10/08      $ 188,670        $  478,110

Ron Hartenbaum              --          --            --         --              --                --

Gary Schonfeld              --          --            --         --              --                --

</TABLE>

-------------------

(1)  Represents the number of shares of the Company's Class A Common Stock
     underlying the options granted.

(2)  The dollar amounts shown under these columns are the result of calculations
     at 5% and 10% compound growth rates set by the Securities and Exchange
     Commission, and therefore are not intended to forecast possible future
     appreciation of the Company's stock price.  In all cases, the appreciation
     is calculated from the award date to the end of the option term.

(3)  On December 4, 1998, Mr. Hauenstein resigned from all of his positions with
     the Company.  These options were forfeited upon resignation.

COMPENSATION OF DIRECTORS 

     The Company pays its directors who are not officers of the Company for 
their services as directors. Directors who are not officers of the Company or 
its affiliates will receive $2,500 per quarter for services rendered as a 
director and $500 for attending in 

                                       75

<PAGE>

person each meeting of the Board or one of its committees. All directors will 
be reimbursed for their expenses in attending Board and committee meetings. 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Not applicable.

EMPLOYMENT AGREEMENTS

     On July 10, 1998, the Company entered into employment agreements with 
Messrs. Hartenbaum and Schonfeld.  The employment agreements are for three 
years and restrict Messrs. Hartenbaum and Schonfeld from competing with the 
Company during the term of employment and for two years after the employment 
agreements terminate.  These agreements provide for annual salaries of 
$300,000 for each one and eligibility for a variety of employee benefits and 
plans generally made available to the Company's key associates at their level.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Company's Board of Directors, who during the first half of 1998, 
comprised of Messrs. Jones, Liptak and Lewis, and effective July 10, 1998, 
was comprised of Messrs. Jones, Liptak, Lewis, Hartenbaum and Vierra and Ms. 
Rico, set the compensation of the Company's executive officers.  Messrs. 
Jones, Liptak and Lewis served as executive officers of the Company and 
certain of its subsidiaries, and also served as directors and officers of a 
number of the Company's affiliates, during 1998.  As individuals, the 
Company's executive officers and directors had no transactions with the 
Company in 1998, except for Mr. Hartenbaum.  See "Employment Agreements" 
above.  See "Certain Transactions" for a discussion of certain transactions 
between the Company and its affiliates.

                                       76

<PAGE>

                      ITEM 12.  SECURITY OWNERSHIP OF CERTAIN
                    BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
                                          
     The following table sets forth certain information as of March 22, 1999, 
regarding ownership of the Company's Class A Common Stock or Class B Common 
Stock by persons (including any group) known to the Company to be beneficial 
owners of more than 5% of either class of stock, the individual directors of 
the Company, each of the executive officers named in the Summary Compensation 
Table and the executive officers and directors of the Company as a group.  
Under the rules of the Securities and Exchange Commission, a person (or group 
of persons) is deemed to be a "beneficial owner" of a security if he or she, 
directly or indirectly, has or shares the power to vote or to direct the 
voting of such security, or the power to dispose of or to direct the 
disposition of such security.  Accordingly, more than one person may be 
deemed to be a beneficial owner of the same security.  A person is also 
deemed to be a beneficial owner of any security which that person has the 
right to acquire within 60 days.

<TABLE>
<CAPTION>
                                         CLASS A COMMON STOCK      CLASS B COMMON STOCK
                                       ------------------------    ---------------------   PERCENT OF VOTE
                                         NUMBER        PERCENT       NUMBER     PERCENT    OF ALL CLASSES OF
BENEFICIAL OWNER (1)                   OF SHARES      OF SHARES    OF SHARES   OF SHARES   COMMON STOCK (2)
--------------------                   ---------      ---------    ---------   ---------   -----------------
<S>                                    <C>            <C>          <C>         <C>         <C>
Glenn R. Jones(3).................     3,385,120        78.7%      1,785,120     100.0%          95.9%
Tuxedo Shirt, Inc.(4).............       541,970        12.6%         --           --             2.4%
Adelphia(5).......................       274,916         6.4%         --           --             1.2%
Ron Hartenbaum(4).................       270,985         6.3%         --           --             1.2%
TAL Financial Corporation(6)......       101,124         2.4%         --           --             0.5%
All executive officers and 
  directors as a group
  (11 persons)....................     3,656,105        85.0%      1,785,120     100.0%          97.1%

</TABLE>

-------------------

(1)  Directors and executive officers named in the Summary Compensation Table
     who are not listed in the table do not beneficially own any of the
     Company's shares.

(2)  Holders of Class A Common Stock are entitled to one vote per share and are
     entitled to elect 25% of the Board of Directors, and holders of Class B
     Common Stock are entitled to ten votes per share and to elect the remaining
     75% of the Company's Board of Directors. The holders of the Class B Common
     Stock have the right to convert their shares of Class B Common Stock into
     shares of Class A Common Stock on a share for share basis at any time at
     their option. 

(3)  Glenn R. Jones is the Chairman of the Board and Chief Executive Officer of
     Jones International and owns all of the outstanding shares of Jones
     International which, in turn, owns 81% of the outstanding common stock of
     Jones Space Segment and 80% of the outstanding common stock of Global
     Group. He is therefore deemed to be the beneficial owner of 1,594,500
     shares of the Class A Common Stock and 1,122,000 shares of the Class B
     Common Stock owned by Jones International, 

                                       77

<PAGE>

     416,667 shares of the Class A Common Stock owned by Space Segment and 
     666,667 shares of Class A Common Stock and 400,000 shares of the Class B 
     Common Stock owned by Global Group. Glenn R. Jones', Jones International's,
     Space Segment's and Global Group's address is 9697 East Mineral Avenue, 
     Englewood, Colorado 80112. 

(4)  The above table does not include any additional shares of Class A Common
     Stock issuable based on the final working capital adjustment for the
     Acquisition, one-half of which would be beneficially owned by Mr.
     Hartenbaum. The number of shares beneficially owned by Tuxedo Shirt, Inc.
     includes the shares beneficially owned by Mr. Hartenbaum. Mr. Hartenbaum
     was elected as a director of the Company upon the consummation of the
     Acquisition. Tuxedo Shirt, Inc. is owned by Messrs. Hartenbaum and
     Schonfeld, and was formerly known as MediaAmerica, Inc., the company which
     sold its assets to the Company in 1998.  The address of Tuxedo Shirt, Inc.
     and Mr. Hartenbaum is 11 West 42nd Street, New York, New York 10036. 

(5)  Adelphia's address is 5 West Third Street, Coudersport, Pennsylvania 16915.

(6)  TAL Financial Corporation's address is 3015 SSE Loop 323, Tyler, TX  75701.

                           ITEM 13.  CERTAIN TRANSACTIONS

     In the following transactions, no third party bids or appraisals were 
obtained. In addition, certain of these transactions are by their nature 
unique to the companies involved. Although the Company believes that these 
transactions were fair to it, no assurance can be given that the terms of 
these transactions were generally as favorable to it as could have been 
obtained from third parties. The transactions described below, other than the 
loans and advances, are expected to continue and additional agreements and 
transactions with affiliated parties may occur in the future, subject to the 
restrictions in the Indenture. 

     Where applicable, references in this section to amounts paid to or by 
the Company include amounts paid to or by the PIN Venture and Superaudio as 
well as the Company. 

ADVANCES 

     Since its inception, the Company has received advances from Jones 
International and related parties to fund its activities. These advances have 
no maturity date and accrue interest at the published prime rate plus 2% 
(approximately 10% in 1998). The Company paid interest on these advances of 
approximately $506,000 for the year ended December 31, 1998. The largest 
total amount of outstanding advances from Jones International and related 
parties in 1998 was approximately $10.3 million. Outstanding borrowings of 
$16.3 million under Radio Holdings' credit facility were used to repay a $6.6 
million note payable to Jones Intercable and to repay $9.7 million in 
advances 

                                       78

<PAGE>

from Jones International in March 1998. At December 31, 1998, outstanding 
advances from Jones International and related parties were $1.4 million. 
Jones International is under no obligation to provide additional financial 
assistance to the Company. 

PURCHASE OF GALACTIC RADIO AND EARTH SEGMENT 

Effective upon the closing of the offering of the Senior Notes in July 1998, 
a note payable to an affiliate the ("Global Group Note") was converted into 
666,667 shares of the Company's Class A Common Stock valued at $15 per share. 
Interest expense on the Global Group Note totaled approximately $413,000 for 
the year ended December 31, 1998. 

     Effective September 30, 1996, the Company purchased all of the common 
stock of Earth Segment from Mr. Jones and Jones International.  In connection 
with this transaction, the Company assumed Earth Segment's obligations under 
an approximately $6.6 million promissory note payable to Jones Intercable. 
Approximately $156,000 of interest was paid on the note for the year ended 
December 31, 1998. This note was paid in full in March 1998 with borrowings 
under Radio Holdings' credit facility. 

TAX SHARING AGREEMENT 

     Prior to April 2, 1997, the Company joined in filing a consolidated tax 
return as provided for under the terms of a tax allocation agreement with 
Jones International and certain of Jones International's subsidiaries. 
Pursuant to the terms of the tax allocation agreement, tax provisions 
(benefits) were allocated to the members of the tax sharing group based on 
their respective pro rata contribution of taxable income (loss) to Jones 
International's consolidated taxable income (loss). As a result of certain 
stock issuances on April 1, 1997 described above, less than 80% of the 
Company's outstanding common stock was owned by Jones International and, 
therefore, the Company is no longer included in the Jones International tax 
allocation agreement. 

     The tax allocation agreement with Jones International gave Jones 
International the option to either make a payment of the tax benefits due to 
the subsidiary members of the tax sharing group or defer such payments until 
a subsequent taxable period in which the subsidiary member generates taxable 
income and has a tax payment due either to Jones International or to a 
federal or state taxing authority. Jones International could defer such 
payments for a period not to exceed five years from the date the tax benefits 
were incurred and would accrue interest at the time the deferred amounts 
originate.  For the year ended December 31, 1998, the Company incurred a tax 
provision of approximately $49,000 to adjust estimated tax provisions to 
actual tax provisions for the year ended December 31, 1997. 

                                       79

<PAGE>

SATELLITE DELIVERY AND PRODUCTION SUPPORT SERVICES 

     The Company has agreements to provide uplinking, playback, trafficking 
and related services to Jones Education Company ("Jones Education"), a 
related party, that terminate on December 31, 2004. Effective February 12, 
1999, Jones Education was merged into Jones International.  The Company has 
the right to terminate the uplinking agreement upon 30-days' written notice. 
The Company received approximately $2.7 million from Jones Education for 
these services for the year ended December 31, 1998.  In June 1998, the 
Company and an affiliate of Jones Education entered into an agreement 
pursuant to which the Company is providing, beginning July 1, 1998, 
additional uplinking, playback, trafficking and related services in 
connection with the lease of an additional channel on one of the Company's 
satellite transponders for a monthly fee of $30,000 and an amount 
representing a proportionate share of expenses. 

SATELLITE TRANSPONDER AGREEMENTS 

     The Company has leased to Jones Education one compressed channel on a 
non-preemptible satellite transponder on a domestic communications satellite 
that the Company historically leased from a third party, which lease was 
prepaid with a portion of the proceeds of the offering of the Senior Notes. 
The Company has the right to terminate the lease to Jones Education at any 
time upon 30-days' written notice. The monthly payments under such lease may 
be adjusted periodically through the December 2004 expiration date based on 
the number of customers using the transponder. The Company received lease 
payments of approximately $1.2 million for the year ended December 31, 1998. 
In June 1998, the Company and an affiliate, Knowledge TV, Inc., entered into 
an agreement pursuant to which such party leased one additional channel on 
the transponder from the Company from July 1, 1998 for a seven-year term with 
an option, exercisable by the related party on six months' advance notice, to 
terminate the lease on July 1, 2001, at a monthly lease rental of 
approximately $59,000. 

     The Company subleases from Satellite Holdings, a related party, an audio 
channel on a non-preemptible satellite transponder on the Galaxy V 
communications satellite for approximately $58,000 per month. Satellite 
Holdings has the right to terminate the sublease prior to its May 2004 
expiration date upon 30-days' written notice. Satellite Holdings leases the 
transponder from a third party pursuant to a lease that terminates in 2004. 
Satellite Holdings charged lease payments of approximately $696,000 for the 
year ended December 31, 1998.

SALES COMMISSIONS 

     The Company earns up to a 3% commission on its sale of airtime for 
informational programming on certain network subsidiaries of Jones Education. 
The Company received commissions from Jones Education of approximately 
$176,000 for the year 

                                       80

<PAGE>

ended December 31, 1998. Effective July 1, 1998, these services for Jones 
Education are being provided by the PIN Venture, which will receive all 
future commissions and will pay for the personnel who perform such services. 

     An affiliate of the Company began providing cable affiliate sales 
services to the Company in late 1997. This affiliate charged the Company 
approximately $906,000 for the year ended December 31, 1998.

AFFILIATE FEES 

     Great American Country is licensed to certain cable television systems 
owned or managed by Jones Intercable. Jones Intercable and its affiliated 
partnerships paid total license fees to the Company of approximately $921,000 
for the year ended December 31, 1998. This affiliation agreement expires on 
December 31, 2010.  Superaudio also licenses its audio services to these 
systems. Jones Intercable and its affiliated partnerships paid Superaudio 
approximately $720,000 for the year ended December 31, 1998. 

     The Product Information Network is distributed to Jones Intercable and 
its affiliated partnerships and to Cox and Adelphia. The affiliation 
agreement with Jones Intercable expires on February 1, 2005. For the year 
ended December 31, 1998, the PIN Venture made incentive payments of 
approximately 77%, of its net advertising revenues to these systems.  Jones 
Intercable and its affiliated partnerships received incentive payments 
totaling approximately $1.6 million for the year ended December 31, 1998. 

COMPUTER SERVICES 

     A subsidiary of Jones International provides computer hardware and 
software services and miscellaneous related support services to the Company 
and other Jones International affiliates. The Company paid service fees to 
this subsidiary of approximately $733,000 for the year ended December 31, 
1998. 

OFFICE LEASE AND SUBLEASE 

     The Company leases and subleases office space in Englewood, Colorado 
from affiliates of Jones International on a month-to-month basis. The Company 
paid rent and associated expenses under these leases and subleases of 
approximately $148,000 for the year ended December 31, 1998. 

                                       81

<PAGE>

ADMINISTRATIVE SERVICES 

     The Company reimburses Jones International and its affiliates for 
certain administrative services provided by these companies, such as legal, 
accounting, purchasing and human resources services. Jones International and 
its affiliates charge the Company for these services based upon an allocation 
of its personnel expense associated with providing these services. These 
allocated expenses totaled approximately $1,116,000 for the year ended 
December 31, 1998.

     An affiliate of the Company charged the Company approximately $197,000 
for the year ended December 31, 1998 for the allocated costs of its airplane 
which was used by the Company in connection with the Notes offering.

TRANSFER OF SATELLITE TRANSPONDER LEASES 

     In April 1997, the Company acquired the satellite transponder leases and 
related subleases held by Space Segment, an affiliate. These various 
agreements were then transferred to a wholly-owned subsidiary, Space 
Holdings. In January 1998, the Company transferred the shares of Space 
Holdings to Space Segment for a nominal amount, and the Company was relieved 
of the obligations related to the activities of Space Holdings. Upon the 
closing of the offering of the Senior Notes, the parties rescinded the 
transfer of the shares of Space Holdings to Space Segment. The Company has 
prepaid the capital lease obligations for such transponders with the proceeds 
from such offering and now owns the transponders. 

CONFLICTS OF INTEREST OF MANAGEMENT

     Messrs. Jones, Liptak, Lewis, Wayne and Thompson and Ms. Steele, who are 
officers and/or directors of the Company, are also officers and/or directors 
of certain affiliated entities and, from time to time, the Company may enter 
into transactions with these entities. Consequently, such officers and/or 
directors may have conflicts of interest with respect to matters potentially 
or actually involving or affecting the Company and such affiliates. In 
addition, such directors and/or officers may have such conflicts of interest 
with respect to corporate opportunities suitable for both the Company and 
such affiliates. Under the Colorado Business Corporation Act, as amended (the 
"Colorado Act"), no conflicting interest transaction shall be void or 
voidable or be enjoined, set aside or give rise to an award of damages or 
other sanctions in a proceeding by a shareholder or by or in the right of the 
corporation, solely because the conflicting interest transaction involves a 
director of the corporation or an entity in which a director of a corporation 
is a director or officer or has a financial interest or solely because the 
director is present at or participates in the meeting of the corporation's 
board of directors or of a committee of the board of directors which 
authorizes, approves, or ratifies the conflicting interest transaction or 

                                       82

<PAGE>

solely because the directors' vote is counted for such purpose, if: (i) the 
material facts as to the director's relationship or interest and as to the 
conflicting interest transaction are disclosed or known to the board of 
directors or the committee and said board of directors or committee 
authorizes, approves, or ratifies in good faith the conflicting interest 
transaction, (ii) the material facts as to the director's relationship or 
interest and as to the conflicting interest transaction are disclosed or 
known to the shareholders entitled to vote thereon and said shareholders 
specifically authorize, approve or ratify in good faith the conflicting 
interest transaction, or (iii) the conflicting interest transaction is fair 
as to the corporation. 

     Conflicts of interest also may arise in managing the operations of more 
than one entity with respect to allocating time, personnel and other 
resources between entities. To the extent deemed appropriate by the Company, 
such conflicts would be resolved by employing additional personnel as 
necessary.

                                      PART IV

                 ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)(1)  Financial Statements and Report of Independent Public
               Accountants.

       (a)(2)  Schedules.

       (a)(3)  Exhibits.

       The following exhibits, which are numbered in accordance with Item 601
       of Regulation S-K, are filed herewith or, as noted, incorporated by
       referenced herein:

3.1    Articles of Incorporation of the Company.  (1)
           
3.2    Bylaws of the Company.  (1)
           
4.1    Indenture, dated July 10, 1998, between the Company and United States
       Trust Company of New York (the "Indenture").  (1)     
    
4.2    Form of Exchange Note is included as Exhibit A-3 to the Indenture.  (1)

4.3    Exchange and Registration Rights Agreement, dated July 10, 1998, between
       the Company and NatWest Capital Markets Limited.  (1)     
   
4.4    Pledge Agreement, dated July 10, 1998, among the Company, United States
       Trust Company of New York and others.  (1)     

                                       83

<PAGE>

4.5    Form of Subsidiary Guaranty is included as part of the Indenture.  (1)

10.1   1998 Stock Option Plan.  (1)
    
10.2   Form of Basic Incentive Stock Option Agreement.  (1)     

10.3   Form of Basic Non-Qualified Stock Option Agreement.  (1)     
           
10.4   Purchase and Sale Agreement dated August 9, 1996, between Jones Global
       Group, Inc. and Jones International Networks, Ltd. (n/k/a JPN, Inc.). 
       (1)
   
10.5   Exchange Agreement dated September 30, 1996, among Glenn R. Jones, Jones
       International, Ltd. and Jones International Networks, Ltd. (n/k/a JPN,
       Inc.).  (1)     
    
10.6   Agreement and its amendment, dated November 6, 1996 and April 1, 1997,
       respectively, between Glenn R. Jones and Jones International Networks,
       Ltd. (n/k/a JPN, Inc.). (1)
    
10.7+  Second Amended and Restated Partnership Agreement of Product Information
       Network Venture dated April 1, 1997, among Jones Infomercial Network
       Ventures, Inc., Cox Consumer Information Network, Inc. and Adelphia
       Communications Corporation.  (1)
    
10.8   Affiliate Agreement dated January 1, 1996, among Great American Country,
       Inc., Jones Programming Services, Inc. and Jones Intercable, Inc.  (1)
    
10.9   Amended and Restated Affiliate Agreement dated August 1, 1994, between
       Jones Infomercial Networks, Inc. and Jones Intercable, Inc., together
       with an Assignment dated January 31, 1995, between Jones Infomercial
       Networks, Inc. and Jones Infomercial Network Ventures, Inc.  (1)     
    
10.10+ Affiliate Agreement dated January 31, 1995, between Product Information
       Network Venture and Cox Communications, Inc.  (1)     
    
10.11+ Affiliate Agreement as Amended, dated October 1, 1995 as amended
       effective April 1, 1997, between Product Information Network
       Venture and Adelphia Communications Corporation.  (1)     
    
10.12  Uplink Services Agreement dated January 1, 1995, among Jones Earth
       Segment, Inc., Jones Infomercial Networks, Inc., Jones Computer

                                       84

<PAGE>

       Network, Ltd., Mind Extension University, Inc. (n/k/a Knowledge TV,
       Inc.) and Jones Galactic Radio, Inc., together with a letter
       agreement dated June 10, 1998, between Jones Earth Segment, Inc.
       and Knowledge TV, Inc.  (1)
    
10.13  Services Agreement dated January 1, 1995, among Jones Earth Segment,
       Inc., Jones Infomercial Networks, Inc., Jones Computer Network, Ltd. and
       Mind Extension University, Inc. (n/k/a Knowledge TV, Inc.), together
       with a letter agreement dated June 10, 1998, between Jones Earth
       Segment, Inc. and Knowledge TV, Inc.  (1)
    
10.14  Transponder Licenses Agreement dated January 1, 1995, among Jones Space
       Segment, Inc., Jones Infomercial Networks, Inc. and Jones Computer
       Network, Ltd., together with a letter agreement dated June 10, 1998,
       between Jones Space Holdings, Inc. and Knowledge TV, Inc.  (1)
                      
10.15  Transponder Licenses Agreement dated January 1, 1995, among Jones
       Satellite Holdings, Inc., Jones Galactic Radio, Inc. and Mind Extension
       University, Inc. (n/k/a Knowledge TV, Inc.).  (1)
    
10.16+ C-3/C-4 Satellite Transponder Service Agreement dated July 28, 1989,
       between GE American Communications, Inc. and Jones Space Segment, Inc. 
       (1)     
    
10.17  Agreement dated June 2, 1998, among MediaAmerica, Inc., Ron Hartenbaum,
       Gary Schonfeld, Jones Network Holdings LLC and the Company.  (1)
  
10.18  Post-Closing Agreement dated July 10, 1998, with MediaAmerica, Inc.,
       Gary Schonfeld and Ron Hartenbaum.  (1)     
    
10.19  Employment Agreement dated July 10, 1998, between Ron Hartenbaum and the
       Company.  (1)     
    
10.20  Employment Agreement dated July 10, 1998, between Gary Schonfeld and the
       Company.  (1)     
    
10.21  Purchase Agreement dated July 2, 1998, between the Company and NatWest
       Capital Markets Limited.  (1)     

21     Subsidiaries.     

27     Financial Data Schedule.     

                                       85

<PAGE>

-------------------

(1)  Incorporated by reference from the Company's Registration Statement
     No. 333-62077 on Form S-4, filed on August 21, 1998.
    
+Portions of this exhibit have been omitted based on a determination by the
Securities and Exchange Commission that certain information contained therein
shall be afforded confidential treatment.      



     (b)  Reports on Form 8-K


          Current Report on Form 8-K dated December 28, 1998, describing the
          closing of the exchange offering of the Company's 11 3/4% Senior
          Secured Notes due 2005.

                                       86

<PAGE>

                                     SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.

                                   JONES INTERNATIONAL NETWORKS, LTD.


Dated:  March 25, 1999             By: /s/ Gregory J. Liptak  
                                       -------------------------
                                       Gregory J. Liptak
                                       President

    
    
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.     


                                    By: /s/ Glenn R. Jones
                                       -------------------------
                                       Glenn R. Jones
Dated:  March 25, 1999                 Chairman of the Board of Directors


                                    By: /s/ Gregory J. Liptak
                                       -------------------------
                                       Gregory J. Liptak
                                       President and Director
Dated::  March 25, 1999                (Principal Executive Officer)


                                    By: /s/ Jay B. Lewis
                                       -------------------------
                                       Jay B. Lewis
                                       Group Vice President/Finance
                                       and Director
Dated:  March 25, 1999                 (Principal Financial Officer)


                                    By: /s/ Keith D. Thompson
                                       -------------------------
                                       Keith D. Thompson
                                       Chief Accounting Officer
Dated:  March 25, 1999                 (Principal Accounting Officer)

                                       87

<PAGE>

                                    By: /s/ Ronald Hartenbaum
                                       -------------------------
                                       Ronald Hartenbaum
Dated:  March 25, 1999                 Director


                                    By: /s/ Yrma G. Rico
                                       -------------------------
                                       Yrma G. Rico
Dated:  March 18, 1999                 Director


                                    By: /s/ Fred A. Vierra
                                       -------------------------
                                       Fred A. Vierra
Dated:  March 25, 1999                 Director


                                       88